Sitting of 25 October 1944

Preamble
The House met at Eleven o' Clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS

  BRITISH PRISONERS OF WAR, ITALY (TREATMENT)
  Mr. Toucheasked the Secretary of State for Foreign Affairs whether any steps are being taken against individual Italians who were responsible for gross violations of the Geneva Convention in the treatment of British prisoners of war.
  The Minister of State (Mr. Richard Law): Yes, Sir. Evidence on the subject has been, and continues to be received and appropriate steps will certainly be taken against the persons guilty of such violations. A number of them are already in our hands.

  POST-WAR SETTLEMENT (PARLIAMENTARY CONSULTATION)
  Mr. Martinasked the Secretary of State for Foreign Affairs whether he will give an assurance that no final agreement will be made by His Majesty's Government to any measures such as the cession of territory, mass transference of population and similar matters calculated to affect the peace of Europe in years to come without prior consultation with Parliament.
  Mr. Law: My hon. Friend may rest assured that in matters of this sort His Majesty's Government will follow the normal constitutional practice. As he is aware, prior consultation with Parliament lies within the discretion of the Executive. His Majesty's Government are of course alive to the desirability of obtaining the support of Parliament and the country for any agreements dealing with such subjects as those mentioned by my hon. Friend.
  Mr. Martin: Are we to understand that while the letter of the Constitution will be observed in this matter, the spirit of the Constitution, which surely demands that the House should not be forced to choose between a Government in which it otherwise has confidence, and accepting solutions of serious questions with which it disagrees, will in fact be infringed?
  Mr. Law: I think we may safely follow the usual constitutional practice in these matters which has served us very well in the past. His Majesty's Government will, of course, do everything in their power to ensure that in everything they do they have the support of the House of Commons.
  Mr. G. Strauss: When considering this matter will the right hon. Gentleman bear in mind there is nothing more likely to sow the seeds of future wars than the sense of grievance and bitterness which would be caused by the transfer of millions of people to other lands from lands they have inhabited for generations?
  Mr. Law: That consideration will be borne in mind. So will a lot of other considerations also.

  HUNGARY (SITUATION)
  Lieut.-Colonel Sir Thomas Mooreasked the Secretary of State for Foreign Affairs whether he can make a statement on the present position in Hungary.
  Mr. Law: No, Sir. I am not in a position to make a statement at the present time.
  Sir T. Moore: In view of Admiral Horthy's frustrated effort on the radio, will Hungary be given a chance to work her passage home like the other satellites?
  Mr. Law: I think we had better wait until we have an opportunity of making a full statement.

  FRANCE (PROVISIONAL GOVERNMENT)
  The following Question stood on the Order Paper in the name of Mr. BOOTHBY:
  To ask the Secretary of State for Foreign Affairs whether His Majesty's Government will now recognise General de Gaulle's administration as the Provisional Government of France.
  Mr. Speaker: Mr. Boothby.
  Mr. Boothby: Happily this Question is unnecessary.
  Mr. Shinwell: On a point of Order. Could we not have the answer to the Question?
  Mr. Law: I understand that the hon. Member is not putting it.
  Mr. Ivor Thomasasked the Secretary of State for Foreign Affairs whether the representative in London of the French Provisional Government is accorded the privileges, immunities and precedence of an ambassador.
  Mr. Law: The representative in London of the French Provisonal Government will be entitled to the same privileges, immunities and precedence as other heads of mission of corresponding rank, when he has presented his letters of credence to the King as French Ambassador. M. Massigli, as was the case with his predecessor, M. Viénot, already enjoys as a matter of courtesy certain privileges and immunities of the kind normally granted to heads of diplomatic Missions.
  Mr. Martinasked the Secretary of State for Foreign Affairs whether he can make any further statement on the policy of His Majesty's Government towards the French Provisional Government.
  Mr. Law: I would refer my hon. Friend to the statement on this subject issued by the Foreign Office on 23rd October.
  Mr. Martin: Does this mean that the French Provisional Government will be represented on the European Advisory Commission?
  Mr. Law: I have at present nothing to add to the statement that has already been issued.

  BULGARIA (ARMISTICE TERMS)
  Captain Duncanasked the Secretary of State for Foreign Affairs whether an armistice has yet been concluded with Bulgaria; and what are its terms.
  Mr. Law: No, Sir.
  Captain Duncan: What is happening? Is there likely to be a decision shortly?
  Mr. Law: Yes, Sir. The terms of the armistice are under consideration by the Allied Governments concerned.
  Sir Irving Albery: Can my right hon. Friend say what is the reason for the unexpected delay?
  Mr. Law: I do not know that the delay is particularly unexpected. It obviously takes a great deal of time to work out complicated armistice terms of this kind.
  Miss Rathbone: Will the terms include the stipulation that all legislation based on race distinction must be cancelled?
  Mr. Law: That, of course, will be taken into account, but I think the hon. Lady had better await the armistice.
  Mr. Rileyasked the Secretary of State for Foreign Affairs whether he can make a statement as to the present status of the Bulgarian Government in relation to the Allied Governments; whether an armistice between the Allies and Bulgaria has yet been concluded; whether Bulgaria is now recognised by the Allied Governments as a co-belligerent, and whether the Bulgarian army is now co-operating with Allied Forces against the common enemy.
  Mr. Law: As I have already said in reply to my hon. and gallant Friend the Member for Kensington North (Captain Duncan) no armistice has yet been concluded between the Allies and Bulgaria and technically speaking therefore a state of hostilities still exists. Although she has declared war on Germany, Bulgaria is not recognised by any of the Allies as a co-belligerent. Bulgarian units are, I understand, taking part in operations under the Soviet High Command against the Germans.
  Mr. Riley: May I ask the right hon. Gentleman whether negotiations are still going on between the Allied Governments with regard to an armistice with Bulgaria?
  Mr. Law: Yes, Sir, certainly negotiations are going on.
  Major-General Sir Alfred Knox: Is His Majesty's Government kept informed of these negotiations?
  Mr. Law: Yes, Sir, fully informed.

  YUGOSLAVIA (BULGARIAN TROOPS)
  Captain Duncanasked the Secretary of State for Foreign Affairs, whether Marshal Tito's negotiations with Bulgarian

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  politicians, regarding the use of Bulgarian troops in Yugoslavia, have been conducted with the knowledge of, and in accordance with, the advice of His Majesty's Government.
  Mr. Law: No, Sir. His Majesty's Government had no prior knowledge of these negotiations which were of a military character. The second part of the Question does not therefore arise.
  Captain Duncan: Is Marshal Tito's action not in conflict with the proposed armistice terms set out by the United Nations for Bulgaria? What does my right hon. Friend propose to do with Marshal Tito in that respect?
  Mr. Law: No, Sir, I think Marshal Tito's action is not in conflict with anything, except in a purely technical sense. In these things it is obviously desirable, and the House will agree, that the greatest possible pressure should be brought to bear upon the enemy, and that is the main consideration.

  ETHIOPIA (BRITISH ADVISERS)
  Mr. Creech Jonesasked the Secretary of State for Foreign Affairs whether he can make available to the House information regarding the situation in Ethiopia during the period since the agreement following the liberation of that country; what British advisers have been appointed or have resigned; who have been reappointed and which appointments lapsed; whether the whole subsidy from Britain has been expended and under what main heads; and whether any report on the period to date will be published.
  Mr. Law: As the reply is rather long I will, with permission, circulate it in the OFFICIAL REPORT.
  Following is the reply:
  As regards the first and last parts of the Question I would refer my hon. Friend to the reply given to my Noble Friend the Member for South Dorset (Viscount Hinchingbrooke) on 16th February last. Since the Agreement referred to was signed His Majesty's Government have assisted the Ethiopian Government to obtain the services of 30 British subjects as advisers in the Ministries of the Interior, Finance, Justice, Public Works, Commerce and
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  Industry, Education, Communications, and Posts and Telegraphs; and as judges and police officers. The adviser on Communications died during the currency of his contract, while the adviser on Posts resigned owing to ill-health. Neither of these two advisers has been replaced. Four other advisers have resigned for various reasons, while eight have left the country on the expiry of their contracts. Advisers in the Ministries of the Interior, Finance, Commerce and Industry, a judge in the High Court and a number of Police officers have renewed their contracts on the expiry of the initial period of two years, while others have varying periods of their contracts still to fulfil. His Majesty's Government have also provided, at their own expense, the British Military Mission to Ethiopia which comprises a comparatively large number of British officers and other ranks.
  As regards the subsidy, I would refer the hon. Member to the information given to the House on 17th May in reply to a Question by my hon. and gallant Friend the Member for Leicester, East (Colonel Lyons). The subsidy is absorbed into the general revenue of the Ethiopian Government and it is not possible to regard it in isolation as having been expended under specific heads.

  RUSSIA (BRITISH SUBJECT'S CLAIM)
  Lieut.-Colonel Marloweasked the Secretary of State for Foreign Affairs whether he is aware that the claim of Mr. Joseph Martin was one of three taken up by the British Government with the Soviet Government and compensation found due before May, 1923: that the other two claims were put forward to Russia on 2nd May, 1923, and paid; and, as the Under-Secretary of State told this House on 9th May, 1940, that Mr. Martin's claim was not put forward with the other two in May, 1923, being unlikely to succeed, will be state the grounds for this and why a demand for compensation was likely to be successful in the other two cases but not in Mr. Martin's case.
  Mr. Law: As regards the first and second parts of this Question, I would invite my hon. and gallant Friend's attention to my reply of 28th July, 1943. As regards the

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  third part of the question, the decision was taken by the Foreign Secretary of the time in the exercise of his discretion.
  Lieut.-Colonel Marlowe: Is my right. hon. Friend aware that as long as 20 years ago the Foreign Office set on record that His Majesty's Government could not consent to relegate a settlement of this claim to an indefinite date? Does he not think, having regard to the years of suffering this man has endured, that the time has now come to implement that pledge?
  Mr. Law: If I were not aware of it it would certainly be through no fault of my hon. and gallant Friend, who has taken every care to see that the full facts of this case were brought before the Government. I very much regret that I cannot give him any further answer than I have given him already.
  Mr. Neil Maclean: Is it not the case that in 1920 the British Government were very anti-Russian; and is there not a changed attitude to-day towards Russia?

  FOREIGN OFFICE DOCUMENTS (PUBLICATION)
  Miss Wardasked the Secretary of State for Foreign Affairs whether he will revert to a previous practice of publishing quarterly in a White Paper the main despatches to his Department from foreign countries, in order that the House may be kept informed of all important matters affecting our foreign relations.
  Mr. Law: I think it is hardly exact to say that it has been the general practice to publish quarterly in a White Paper the main despatches from foreign countries and I can give no undertaking that my right hon. Friend, the Foreign Secretary will initiate periodical publication of this kind as a matter of routine. In cases where there may be a demand for the publication of correspondence on any particular aspect of the foreign relations of His Majesty's Government, my right hon. Friend will take into account as in the past the desirability of keeping Parliament informed when to do so would not be contrary to the public interest.
  Miss Ward: Is it not a fact that in the past White Papers were issued regularly covering official despatches?
  Mr. Law: No, Sir; I do not think that was exactly the position. I think the position was that when there were papers of particular interest to the House of Commons they were published from time to time, when the public interest was not damaged by so doing.

  BALKANS (GREAT BRITAIN AND RUSSIA)
  Mr. Rileyasked the Secretary of State for Foreign Affairs if the British and Soviet Governments came to any decision at the recent Moscow Conference to establish at the conclusion of the war separate British and Russian zones of influence in the Balkan countries.
  Mr. Law: No, Sir.

  BRITISH SCIENTIFIC MISSIONS
  Mr. Saltasked the Secretary of State for Foreign Affairs what are the functions of the British Council's Scientific Mission in Chungking; to what extent there is liaison between it arid the British Embassy in China; and whether it is the responsibility of this mission or the Embassy to obtain for the Chinese authorities all the information they require about scientific developments in this country, whether in relation to service, industrial, agricultural or medical matters.
  Mr. Law: On the advice of His Majesty's Government, the British Council have established in Chungking an office to promote scientific and technical contacts with China. Its title is "The British Council Cultural and Scientific Office." It is directed by Dr. Joseph Needham, F.R.S., and it is under the general supervision of His Majesty's Ambassador. The Ambassador is responsible for ensuring that all inquiries made by the Chinese authorities are passed to the appropriate authorities in the United Kingdom. The Service attachés deal with purely military inquiries, and Dr. Needham with all the others.
  Mr. Saltasked the Secretary of State for Foreign Affairs in what foreign capitals British scientific missions or attachés are now maintained, and whether he can give particulars.
  Mr. Law: No scientific attachés have yet been appointed to His Majesty's mis-

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  sions in foreign countries, but in Washington a British scientific mission exists for the purpose of exchanging scientific information with the United States Government. In Chungking arrangements exist of which details are given in my answer to my hon. Friend's last Question. The possibility of making similar arrangements elsewhere is under consideration. The Service attachés attached to His Majesty's missions in the various capitals, deal with scientific matters within their respective spheres.
  Sir Oliver Simmonds: Can the Minister say whether these scientific missions are really composed of scientific men or merely of civil servants posing as scientists?
  Mr. Law: I may be wrong, but I should not have thought that Dr. Joseph Needham was a civil servant posing as a scientist.

  ROYAL AIR FORCE

    West Indian Personnel (Dependants)
    Mr. Sorensenasked the Secretary of State for Air why certain responsibilities are accepted for wives or women living as wives, legitimate or illegitimate children and dependants of British or British West Indian citizens when serving in the R.A.F. if enlisted in Great Britain, but only for wives, legitimate children and no dependants of similar citizens if enlisted in the British West Indies; and if he will abolish this discrimination.
    The Secretary of State for Air (Sir Archibald Sinclair): As the reply is necessarily long, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.
    Mr. Sorensen: In that reply, is the Minister giving an indication whether any attempt is being made to remove this discrimination?
    Sir A. Sinclair: I am glad to tell my hon. Friend that there is no discrimination on racial grounds. A British West Indian subject of colour, enlisting in this country, would qualify for the allowance to which my hon. Friend has referred, subject to the normal conditions, while a white resident of the West Indies, entering the Services locally, would not do so.
    An Hon. Member: Why?
    Following is the reply:
    Family allowance in respect of wives and legitimate children is a recognised element in the peace-time pay code of the three Services and is payable at appropriate rates to all qualified personnel recruited into the Imperial Forces in this country or overseas. Dependant's allowance, and the special dependant's allowance which is payable in respect of an unmarried dependant living as a wife or children who are brought up as members of the soldier's, rating's or airman's household, were however introduced for personnel enlisted in this country as emergency measure consequent upon the adoption of national service, for it was recognised that it would be wrong to compel a man to leave his civilian employment without making provision for the maintenance of such dependants. Similar arrangements have been made in those colonies where conscription has been introduced.
    Payment of dependant's and special dependant's allowances is conditional on the fulfilment of certain clearly defined conditions, e.g., dependant's allowance is payable only if the man made a substantial contribution towards the support of the dependant before his enlistment, while special dependant's allowance is payable only if it is established that the woman lived with him as his wife and was maintained by him on a permanent basis for a period of not less than six months immediately prior to the date of enlistment; and applications are in this country investigated in detail by the Assistance Board before an award is approved. These arrangements, which are common to the three Services, have not been extended to cover schemes of voluntary enlistment in the Colonies, and such an extension would result in obvious difficulties in view of differences in local custom and the necessity for detailed investigation and assessment.
    A scheme for voluntary enlistment of West Indians for ground duties was started a year ago and it should have been explained to all recruits that they would not be eligible for dependant's allowances. I am not, however, satisfied that during the early stages of recruitment the position was made clear beyond all possibility of misunderstanding. Arrangements have in consequence been made to investigate claims as a special

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    exception to the general rule in cases where the airman may have been led to assume that these allowances would be issued. I would stress that there is no element of racial discrimination in the procedure I have described. A British West Indian subject of colour enlisting in this country would qualify for these allowances, subject to the normal conditions, while a white resident of the West Indies entering the Services locally would not be eligible.

    Air Passages to France (Authorisation)
    Mr. Turtonasked the Secretary of State for Air what steps are taken to prevent unauthorised passengers entering and travelling by aircraft proceeding between this country and France:
    Sir A. Sinclair: All passenger traffic by air between the United Kingdom and France is subject to the control of security officers who are stationed at the terminal airports and are responsible for checking the credentials of passengers..
    Mr. Turton: Does not the ease with which Mr. Refitt is able to go by air to and from France, show that something is wrong in that system?
    Sir A. Sinclair: I should hesitate to draw any conclusions from these alleged flights until the investigation is complete.
    Mr. Turton: Is the Minister taking steps to make inquiries, with a view to preventing Mr. Refitt making similar flights without an exit permit?
    Sir A. Sinclair: I thought that my right hon. Friend the Chancellor of the Exchequer made it clear the other day that a thorough investigation is being made.
    Earl Winterton: Would the Secretary of State explain a little more clearly what he means by "under the authority of the security officers"? From whom do they receive their instructions? How is it that people arc constantly boasting that they have been able to get over to France?
    Sir A. Sinclair: They receive their instructions from the security authorities, but the station commanders work closely with them.
    Earl Wiriterton: Who are the security authorities, and why is there all this mystery about the matter?
    Sir A. Sinclair: That question should be addressed to the appropriate Minister. They are not my officers, but we do cooperate with them. I am responsible for the part played by the station commanders in informing these officers about the departure of aircraft carrying civilian passengers from our airports.

    Officers' Club, Paris
    Major Sir Jocelyn Lucasasked the Secretary of State for Air if the club proposed to be established by Mr. Rafitt for Air Force officers in Paris is to be under Air Force welfare or a commercial concern run for profit; and if he will give an assurance that no authorisation will be given without stringent inquiries into the bona fides in this or similar cases.
    Sir A. Sinclair: Apart from statements which have appeared in the Press, my Department has no knowledge of this proposed club. I can certainly assure my hon. and gallant Friend that no club for the Royal Air Force would be accorded official recognition or support without full inquiry.
    Sir J. Lucas: Will the Minister make it quite clear to the French that this club is not authorised? Apparently Mr. Rafitt got hold of free furniture from the British, because of his good intentions.
    Sir A. Sinclair: I think we are in close touch with the French, and I do not think there can be any misunderstanding. I do not know that this club is in existence.

    Food Regulations (Offences)
    Mr. Austin Hopkinsonasked the Secretary of State for Air whether, when the Air Council expressed its grave displeasure with the senior officers guilty of offences against the food regulations at 54 Group Training Command, Regent's Park, it also expressed its grave displeasure with the members of the Air Council concerned in the same offences.
    Sir A. Sinclair: No member of the Air Council committed an offence. Certain members of Council, of whom I was one, anxious to encourage what appeared in its inception to be a praiseworthy enterprise, bought non-rationed food from the farm. That this was not an offence was confirmed by an inquiry which, at my request, the Ministry of Food made into my own purchases.

    A.T.C. Entrants
    Sir O. Simmondsasked the Secretary of State for Air if he is aware that members of the A.T.C. who obtain low credits, and even those who have been dismissed from the Corps, are being permitted to enter the R.A.F., whilst many of those receiving highest credits in the A.T.C. are being directed to the Army; and what action he proposes to take.
    Sir A. Sinclair: So far as I am aware, the position is not as indicated in the Question, but if my hon. Friend has information to the contrary and will let me have details, I will gladly look into the matter.
    Sir O. Simmonds: Is it not a fact that similar complaints have been made time and time again at Question time on the Floor of the House? Does not my right hon. Friend agree that even if there was not a legal responsibility there was a strong moral undertaking that these boys would be permitted to join the R.A.F.? Does he not understand the soul-destroying disillusionment from which these lads are suffering in present circumstances?
    Sir A. Sinclair: The particular point raised in my hon. Friend's Question has never been raised in this House before. As regards the disappointment of the air training cadets, I share it myself very much indeed, but the fact is that there are no vacancies for them in the Royal Air Force, and that they can best serve the country now by joining the Army.
    Sir O. Simmonds: May I give notice that I propose to raise this matter on the Adjournment at the earliest opportunity?

  CIVIL AVIATION (EMPIRE CONFERENCE, DELEGATES)
  Sir O. Simmondsasked the Secretary of State for Air for what reason he has included the head of an aircraft operating organisation among the British official delegates to the Empire Air Conference in Montreal.
  Sir A. Sinclair: Lord Knollys, chairman of the British Overseas Airways Corporation, has been included in the U.K. Delegation to the Montreal Conference because is was felt that the advice of the Corporation would be of value on a wide variety of operational and technical points which may be expected to arise during the talks.
  Sir O. Simmonds: Seeing that a representative of the State air line has been included, can my right hon. Friend tell the House why he did not include representatives of the private enterprise organisations, such as Railway Air Service, or British Latin-American Air Lines; or is this conference merely an attempt to perpetuate the chosen instrument?
  Sir A. Sinclair: No, Sir. This conference is on the official level between the Governments of the Empire. The B.O.A.C. is the only operating company which works between the different parts of the Empire.
  Mr. Bowles: Why did the Under-Secretary of State refuse to disclose the names of the officials representing the British Government, while "The Times" had them on the following day?
  Sir A. Sinclair: I do not know that my right hon. and gallant Friend did refuse. Perhaps he did not have the papers with him at the time. I cannot say why he did it. My right hon. and gallant Friend has just informed me that he considered it was unusual to disclose the names of civil servants.

  MINISTRY OF INFORMATION

    Social Survey Information (Circular Letter)
    Mr. Culverwellasked the Minister of Information for what purpose industrial undertakings are being asked to submit the names of employees willing to act as correspondents to provide his Department periodically with reports of rumours, the state of morale and of what their fellow workers are saying and thinking about the war and national news and local and domestic affairs.
    The Minister of Information (Mr. Brendan Bracken): I presume my hon. Friend is referring to a circular letter written by a member of the staff of the Regional Information Officer in Bristol. The writer was obviously anxious to learn the opinions and interests of the public outside the world of officials. I doubt not that this pompous document was the product of an excess of zeal. It should never have been issued and it has been withdrawn.

    Paper Supplies (Pamphlets)
    Mr. Boothbyasked the Minister of Information whether a special allocation

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    of paper can be made to the hon. Member for East Aberdeenshire for the publication of a pamphlet on the subject of the Bretton Woods Agreement.
    Mr. Bracken: No, Sir, not from the resources of the Ministry of Information. Judging by the vast number of pamphlets which are inflicted upon hon. Members of the House, my hon. Friend ought to have no difficulty in arranging with a printer to produce a pamphlet on currency or on any other subject which occurs to him.
    Mr. Boothby: How does my right hon. Friend consider that public controversy can be conducted in a democracy if one side collars all the paper? One can get a small allowance for a small issue of pamphlets, but I want to issue a lot of pamphlets.
    Mr. Bracken: I can assure my hon. Friend that a large number of printers have stocks of paper which will help him in his controversial zeal, and that, far from the Government having all the paper, it is the fact that the private consumption of paper in this country is far greater than the comparatively small amount consumed by the Government.
    Mr. Shinwell: Will the right hon. Gentleman agree to provide facilities to enable the Opposition to produce a White Paper?
    Mr. Bracken: If the talent is there, I shall be glad to consider the proposition.
    Mr. Astor: If paper is available, why does the Home Secretary say there is not sufficient to enable the Prison Commissioners to produce a report?
    Mr. Bracken: I am not here to answer for the Home Secretary, but I daresay he thinks the topic is rather ghoulish.

    Great Britain (Films and Photographs)
    Lady Apsleyasked the Minister of Information whether he is satisfied that the best documentary films and photographs showing the United Kingdom during this war and of the British Army, R.N. and the R.A.F. are being suitably stored and filed and annotated for future reference by historians and artists; and by whom and under whose care.
    Mr. Bracken: Yes, Sir. Copies of these films are being carefully stored by the
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    Service Departments and by the Ministry of Information.
    Lady Apsleyasked the Minister of Information whether films are being prepared for presenting the English way of life to other members of the United Nations in exchange for theirs.
    Mr. Bracken: The Ministry of Information have for a long time been making films for this purpose, and are always willing to assist other members of the United Nations to get their films a showing in this country.

  OFFICE ACCOMMODATION, LEICESTER (REQUISITIONING)
  Wing-Commander Jamesasked the Parliamentary Secretary to the Ministry of Works if, and for what purposes, office accommodation has been requisitioned or otherwise acquired in the city of Leicester for post-war Government usage.
  The Parliamentary Secretary to the Ministry of Works (Mr. Hicks): With the exception of a single building, which has been rented for use as a Ministry of Labour Resettlement Advice Office, no office accommodation has been requisitioned or otherwise acquired in Leicester by the Ministry of Works for post-war usage.

  HOUSING

    War Damage Repairs, London (Roofing)
    Mr. Astorasked the Parliamentary Secretary to the Ministry of Works whether, in view of the shortage of slaters and tilers and of the unsatisfactory nature of felt roofing under winter conditions, he will consider using metal roofing for houses in the London area.
    Mr. Hicks: I am glad to be able to inform my hon. Friend that corrugated metal, as well as corrugated asbestos cement sheets, are being used to provide roof cover during the winter. I must, however, add that roofing felt, properly used, is also giving adequate and acceptable roofing for the winter. All suitable materials and methods are being employed.
    Mr. Astor: I suppose the operative words are "properly used." In view of the great importance of using new materials or methods for roofing during

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    this winter, will my hon. Friend give further particulars during the Debate on Friday?
    Sir Richard Wells: What is the position of manufacturers of roofing tiles at present? Are there to be increased supplies?
    Mr. Hicks: Whether I shall make a statement on Friday depends on whether I shall get an opportunity; but certainly the information will be available for the Debate. In regard to the question of an increased supply of roofing tiles, that matter is receiving very urgent consideration, and preparations are now being made.

    Emergency Construction
    Mr. Bossomasked the Parliamentary Secretary to the Ministry of Works whether he has provided the Ministry of Supply with an inventory of the component parts going to form the emergency factory-built houses which that Ministry will be responsible for providing; and whether he can give an assurance that these will be ready in time and will not form bottlenecks preventing the completion of these houses.
    Mr. Hicks: Yes, Sir. With regard to the second part of the Question, I am informed by my right hon. Friend the Minister of Supply that the detailed production programme to meet the required deliveries is now being worked out.
    Sir Charles Edwardsasked the Minister of Health whether, seeing that temporary houses will be erected chiefly by unskilled labour, he will arrange with local authorities the conditions and subsidy to be paid for erecting more permanent houses and enabling them to use for this purpose the skilled labour available.
    The Parliamentary Secretary to the Ministry of Health (Miss Horsbrugh): My right hon. and learned Friend is already discussing with representatives of the Local Authority Associations the terms and conditions of subsidy in respect of permanent houses.
    Mr. Higgsasked the Minister of Health the districts in which the Portal houses will, in the near future, be placed on exhibition; and how, in view of the wish of Lord Portal not to have his name associated with them, they will in future be officially designated.
    Miss Horsbrugh: Arrangements are being made to exhibit full-sized models in Newcastle, Leeds, Manchester, Nottingham, Birmingham, Cambridge, Cardiff and Bristol. The temporary house in question, though designed by the Ministry of Works, is officially known as the Pressed-Steel Bungalow.

  ROYAL NAVY

    Officers' Pay
    Vice-Admiral Taylorasked the First Lord of the Admiralty to what extent the emoluments paid to naval officers are based on their responsibilities in accordance with their rank or their age.
    The First Lord of the Admiralty (Mr. A. V. Alexander): The emoluments of naval officers are related to rank. The responsibility attaching to any particular appointment is taken into consideration in deciding the rank of officer who should fill it.
    Vice-Admiral Taylor: Is my right hon. Friend aware that, in answer to a previous Question, he specially drew attention to the age of naval officers when comparing their pay with that of officers in the other Services, thereby entirely ignoring the naval officers' length of service before they acquired their present rank? In view of that answer, will he discontinue this practice?
    Mr. Alexander: I hardly think that that arises out of this particular Question.

    Accident, Portland
    Mr. Loganasked the First Lord of the Admiralty the result of the inquiry into the loss of the four naval ratings; and if, under the special circumstances of the case, he is prepared to pay full burial expenses and compensation for loss of life of Seaman Trainor, Flinder Street, Liverpool.
    Mr. Alexander: The report of the inquiry into this accident is being examined, and I am not yet in a position to state the result. In the case of the late Seaman Trainor, the cost of the coffin and of its conveyance to Liverpool has been met from naval funds. The next-of-kin has been informed that, in addition, a grant of up to £5 will be paid towards the remaining funeral expenses.
    Mr. Logan: Is the right hon. Gentleman prepared, if the Treasury will not allow an ordinary pension, to give an ex gratia payment to the dependants?
    Mr. Alexander: The report is being examined. If negligence by naval personnel, apart from those who are deceased, were found to have operated, compensation, without reference to any sum that might be due for the payment of pensions, would certainly be considered.
    Mr. Logan: Is it possible for the right hon. Gentleman to let me have the results of the inquiry?
    Mr. Alexander: I will certainly keep in touch with my hon. Friend.

    Attachés (Scientific Qualifications)
    Mr. Saltasked the First Lord of the Admiralty whether, in appointing attachés to Embassies and Legations overseas, regard is had to the scientific or technical qualifications of the officers concerned; and whether, in view of the increased importance of scientific developments in warfare, he is satisfied that sufficient attention is being paid to this matter.
    Mr. Alexander: Yes, Sir.

  JAMAICA

    Victoria Jubilee Hospital (Administration)
    Mr. Sorensenasked the Secretary of State for the Colonies why Dr. Stockhausen resigned from the superintending of the Jamaica maternity hospital; how many other doctors resigned, and for what reasons; and what representations or inquiries were made on the matter.
    The Secretary of State for the Colonies (Colonel Oliver Stanley): Dr. Stockhausen, senior medical officer at the Victoria Jubilee Hospital, resigned nearly two years ago, after being informed of the Governor's displeasure at the lack of discipline and proper organisation at the hospital. His professional competence was not in question. No other doctor has resigned from the hospital. Representations were made by two elected members of the Legislative Council about the state of affair; at the hospital. Investigation showed that conditions were unsatisfactory, owing to the failure of the senior
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    medical officer to support the matron in her efforts to maintain proper discipline, and to take sufficient interest in administrative duties.
    Mr. Sorensen: Is the right hon. and gallant Gentleman satisfied that this hospital is now being run on right lines?
    Colonel Stanley: I have not recently had a full report, but I gather that there has been considerable improvement.

    Women (Employment)
    Mr. Sorensenasked the Secretary of State for the Colonies approximately how many women are wage-earners in Jamaica, and in what main occupations; what is the normal wage for domestic servants and Government office-cleaners or assistants, and the hours they work; and whether consideration is being given to the need of providing non-manual employment for women at fair rates of pay and under reasonable conditions.
    Colonel Stanley: As the reply necessarily contains a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Mr. Sorensen: Is anything being done to provide non-manual employment for the women in Jamaica?
    Colonel Stanley: Yes, something is being done. The hon. Member will see it set out in the answer.
    Following is the reply:
    According to the census returns in January, 1943, there were 182,293 female wage-earners in Jamaica, of whom 62,792 were domestic servants, 31,485 farm-workers, and 12,461 general labourers. The remainder consisted of clerks, teachers, nurses, seamstresses, and other personal service workers. The normal wages for domestic servants range from 4s. weekly, with board, in working class homes, to 16s. weekly, with rooms, among the wealthier classes. The average hours of employment are 72 a week. Part-time Government office-cleaners and assistants receive maximum basic pay of 14s. a week; full-time employees working 48 hours a week receive basic pay of 14s. a week, rising by annual increments of 2s., to 18s. a week. A war bonus of 33⅓ per cent. is payable on the basic rates. The answer to the last part of the Question is in the affirmative. An extensive development of medical and

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    educational services is contemplated, involving a considerable expansion of training facilities. Some training is undertaken by Government and by private interests with the object of fitting women for industrial activities.

  UGANDA (COTTON AND COFFEEt PROFITS)
  Captain Duncanasked the Secretary of State for the Colonies what profits have been derived by the Government of Uganda from the war-time control of cotton and coffee; and how he proposes to dispose of them.
  Colonel Stanley: The estimated profit from the controlled marketing of cotton amounts to not less than £2,400,000 in respect of the crop years 1942–43 and 1943–44. The profits of hard coffee control to 31st May, 1944, amounted to £119,461. The general intention is that these profits should be expended for the benefit of the areas in which the production takes place, and the Governor has set up a Committee, which, after consultation with all interests concerned in growing, processing and marketing, will recommend, in order of priority and in broad outline, the objects for which the funds accumulated should be used.
  Captain Duncan: Will my right hon. and gallant Friend bear in mind the large grants made from the Colonial Development Fund in relation to this large amount which is available for spending on the Colony?
  Colonel Stanley: Certainly.
  Mr. Shinwell: Will the right hon. and gallant Gentleman, when making a speech on political matters in future, take note of the benefits of State enterprise?
  Colonel Stanley: Under rather exceptional conditions of monopolistic trading, due to the war.

  PALESTINE POLICE FORCE
  Mr. E. P. Smithasked the Secretary of State for the Colonies what are the regulations governing the marriage of members of the Palestine police.
  Colonel Stanley: If a British constable or N.C.O. marries after his attestation he must, in accordance with the terms of
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  his contract, obtain the approval of the Inspector-General before he can be placed on the married establishment of the British Section and so qualify for certain privileges and allowances. I am sending my hon. Friend a copy of the standard contract for British police, in which these regulations are set out in full.
  Mr. E. P. Smithasked the Secretary of State for the Colonies in what circumstances pensions in respect of serious personal injuries, sustained while on duty, are payable to members of the Palestine police.
  Colonel Stanley: An award is made if the injury was sustained while on duty, necessitates or accelerates discharge from the Force, and is so serious that an individual's capacity to contribute to his own support has been materially impaired or totally destroyed.
  Mr. Smith: Would my right hon. and gallant Friend consider that the loss of an eye would materially impair a man's chance of earning his living? I beg to give notice that I will raise the matter on the Adjournment.

  ENEMY-OCCUPIED COUNTRIES (GERMAN CURRENCY)
  Sir Leonard Lyleasked the Prime Minister whether, in view of the extent to which Germany has filled occupied countries with worthless marks, though accepted compulsorily at their face value, the Allies will make a condition of any peace treaty the recognition and repayment by Germany of this money at its face value.
  The Prime Minister (Mr. Churchill): The issue of currency is only one of the many ways in which Germany has exploited the countries which she has occupied. I cannot at this stage say in what way her various exactions will be dealt with at the final settlement.

  MINISTER-RESIDENT IN WEST AFRICA (APPOINTMENT)
  Mr. Turtonasked the Prime Minister when a successor to Lord Swinton as Minister-Resident in West Africa will be appointed; and who is, in the meantime, carrying out the duties of that office.
  The Prime Minister: I am not yet in a position to state the name of the new Minister, but there will be no undue delay. The senior Governor will preside at any War Council or other meeting that may be necessary. He will be assisted by the Resident Minister's secretariat in discharging the day-to-day work of the office.

  "UNCONDITIONAL SURRENDER" POLICY
  Sir T. Mooreasked the Prime Minister if unconditional surrender is still the policy of His Majesty's Government and the United Nations; and how this policy is reconciled with the system by which former enemies have under military pressure changed sides, and are now, apparently, allies.
  The Prime Minister: Unconditional surrender, in the sense of "No bargaining with the enemy" is still the policy of His Majesty's Government. The Three Power Declaration of 12th May to the Axis satellites should also be borne in mind.
  Sir T. Moore: My right hon. Friend will appreciate, I hope, that it is sometimes very difficult to follow the foreign policy of the United Nations, as described by the President?
  Mr. John Dugdale: Will the right hon. Gentleman assure the House that individual members of the Nazi Party who surrender unconditionally and change sides, will not be given positions of responsibility in any Government set up in Germany?
  The Prime Minister: I think it would be a great mistake for me, an the spur of the moment, to go into details on questions of policy which will necessarily have to be settled between the principal Allies, but I do not think there need be any alarm.

  FOOD SUPPLIES

    Sweets Ration
    Sir L. Lyleasked the Minister of Food whether he will, at least during the coming winter, increase the sweets ration.
    The Minister of Food (Colonel Llewellin): As I stated on 17th October, a special increase in the sweets ration will
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    be available for children at Christmas. I cannot do more than this with the present limited supplies.

    Milk
    Mr. Mackasked the Minister of Food what steps he proposes to take now that the Newcastle-under-Lyme Stoke-on-Trent milk rationalisation scheme has been temporarily suspended to secure in the future an adequate fair and proper distribution of milk in these localities.
    Colonel Llewellin: The distribution of milk to consumers in Newcastle-under-Lyme and Stoke-on-Trent will continue to be on a fair and equitable basis. The retail rationalisation schemes are designed to secure economies in transport and manpower and do not affect the quantities of milk to which consumers are entitled.
    Mr. Mack: Am I to take it that, in spite of the fact that the scheme was originally proposed and temporarily suspended, that same scheme is to be re-substituted?
    Colonel Llewellin: I am looking into that matter, and seeing what can be done in the circumstances.
    Mr. Mack: Will the Minister give an assurance that, if any individual or collective case of hardship is occasioned, it will have his sympathetic consideration?
    Colonel Llewellin: I think there were some such cases under that scheme, and that is why it was suspended. I am looking into the whole matter, and would certainly like to keep in touch with my hon. Friend if he has any points to bring to my notice.
    Major Yorkasked the Minister of Food if he is aware of the continuing unsatisfied demand for T.T. milk in Yorkshire; and what steps he is taking to satisfy this demand.
    Colonel Llewellin: Yes, Sir, this is so in certain districts, and is due to transport difficulties which we are trying to overcome.
    Major York: Is my right hon. and gallant Friend aware that, now, there is a wholesale organisation which is able to sent T.T. milk to retailers; and will he arrange with the food officers that T.T. milk which is now being bulked with other milk, is allocated to this firm?
    Colonel Llewellin: I do not know the answer to that on the spur of the moment, and I think my hon. and gallant Friend had better put the question down.
    Major Yorkasked the Minister of Food the number of milk producers with a T.T. licence in Yorkshire and how many sell, respectively, as T.T. milk, retail or wholesale and to dairies where it is bulked with ordinary milk.
    Colonel Llewellin: There are 288 with 306 herds between them. The further particulars for which my hon. and gallant Friend asks are not readily available, but I will get them as soon as I can.

    Illegal Sales
    Mr. Austin Hopkinsonasked the Minister of Food whether, in cases of the illegal sale of food, action is taken not only against the sellers but also against those who procure customers for the former, by soliciting orders, which they know can only be fulfilled illegally.
    Colonel Llewellin: Yes, Sir. Such action can be taken, and, in serious cases, no doubt, would be taken, under the Accessories and Abettors Act, 1861, or under Section 5 of the Summary Jurisdiction Act, 1848.
    Mr. Hopkinson: Are we to understand that, though guilt attaches to the sellers, no guilt attaches to the touts and no guilt attaches to those who are purchasers?
    Colonel Llewellin: It is rather difficult to answer in general cases. It may vary under different Orders, but, where there is no offence in buying, there cannot be an aider and abbettor in that sense.
    Mr. Hopkinson: The right hon. Gentleman referred to a particular Order and case. In the case in question, a licence was issued for the production of food on specific grounds. These conditions were—
    Mr. Speaker: The hon. Member is giving information, not asking for it.

    catering Trade
    Flight-Lieutenant Teelingasked the Minister of Food what special arrangements he is making to meet catering difficulties in Brighton and elsewhere on the South Coast, arising out of the raising of the ban on visitors to these areas; and whether he is making any special arrange-
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    ments to staff the hotels and catering establishments being, or likely to be, derequisitioned and re-opened.
    Colonel Llewellin: I have recently given instructions that, in the coastal counties of the South and East of England which have been affected by the ban on visitors, favourable consideration shall be given to any application from a trader who wishes to re-open a catering establishment which he closed since the beginning of the war. The question of staff for these establishments is not a matter for my Department.
    Sir I. Albery: Can the right hon. Gentleman say why feeding arrangements generally in the North of England are so much better than in catering establishments in the South?
    Colonel Llewellin: That is rather a different question.
    Flight-Lieutenant Teelingasked the Minister of Food if he will now approach the war departments to arrange that all those at present serving who were previously in the food and catering business and who wish to return to this occupation after hostilities cease, be asked to state that this is their intention and where they previously traded, so as to enable Ministry officials to decide what licences may be granted in the immediate future to other applicants, without prejudicing ex-Servicemen's post-war chances.
    Colonel Llewellin: No, Sir.
    Mr. Evelyn Walkden: May I ask the Minister whether he intends to make a statement concerning facilities for ex-Servicemen to enter the catering trade, as distinct from the statement made outside by the Parliamentary Secretary?
    Colonel Llewellin: The statement by the Parliamentary Secretary did not refer to that. It referred to people in particular areas: My right hon. Friend was in the Isle of Wight, when he made it, investigating these conditions, and had my full authority to make the statement. I am, of course, always ready to give information to the House.
    Mr. Walkden: Will the ex-Servicemen get priority?
    Flight-Lieut. Teeling: Does the Minister realise that large numbers of ex-Servicemen are most anxious to stake

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    their claims, and that it is impossible at the present time to decide for what shops, or in what streets, licences can be given to people applying now, and that it is very unfair?
    Colonel Llewellin: Ex-Servicemen who are ex-traders certainly get priority. That has been laid down or explained by the President of the Board of Trade on behalf of the whole Government, and I have enlarged upon it from the food interest point of view from time to time. Any ex-Serviceman can certainly write, either to the Ministry of Food or to the local food executive officer, saying that he wants to re-open his business as soon as he is demobilised; but we already have his name on the list, and, as soon as he is demobilised, he will immediately go into the priority class.

  GIBRALTAR AND MALTA (EDUCATION)
  Miss Wardasked the Secretary of State for the Colonies whether he has yet received from Gibraltar a scheme for future education; and whether any scheme is in preparation in Malta.
  Colonel Stanley: The answer to both parts of the Question is in the affirmative. The Gibraltar proposals provide for a comprehensive reorganisation of the educational system, and will, I hope, shortly be published. In Malta, plans are still being worked out.

  COLONIAL PUBLIC DEBT
  Captain Cobbasked the Secretary of State for the Colonies what is the cost of the service of the Colonial Public Debt.
  Colonel Stanley: The annual public debt charges of the various colonial territories amount to £5,884,000.
  Captain Cobb: Is my right hon. Friend aware that this works out at approximately 5 per cent., compared with 2 per cent. for the service of the National Debt, and will he be prepared to approach the Treasury with a view to lightening this burden, which presses very hard on the great majority of our Colonies?
  Colonel Stanley: I will look into that.

  AFRICAN COLONIES

    Civil Servants, West Africa (Cost of Living)
    Mr. Edmund Harveyasked the Secretary of State for the Colonies the latest available figures showing the increase in the cost of living for civil servants in the West African Colonies as compared with before the war.
    Colonel Stanley: As the reply necessarily contains a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the reply:
    There has been no cost of living survey specifically for civil servants in West Africa but the following are the latest available figures showing increases in the general cost of living index since the outbreak of war:
    Nigeria. 1st April, 1944–161.30.
    (A. fall from 173.65 at 1st October, 1943.) Gold Coast. September quarter, 1944–169. Sierra Leone. June, 1944–255.
    Gambia. First quarter, 1944–210.
    (This represents increase above index of 100 for average prices ruling in 1938.)
    Action has since been taken by subsidy to reduce this figure to 183.7.
    Mr. Edmund Harveyasked the Secretary of State for the Colonies whether he is prepared to give further consideration to the substitution of a war bonus on similar lines to that in use in Great Britain for the present cost of living allowance to colonial civil servants in West Africa.
    Colonel Stanley: A revised scheme of separation and cost of living allowances was introduced in West Africa in July, 1944, and I see no reason to alter it.
    Mr. Harvey: Has the Minister received any representations on behalf of the Colonial civil servants concerned?
    Colonel Stanley: There have been some representations, but this was only brought in after very careful consideration, and after the visit of one of my officers to West Africa.

    Migratory Labour (Rest Compounds)
    Colonel Lyonsasked the Secretary of State for the Colonies whether he can indicate the progress that has been made

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    in erecting and organising rest compounds for migratory labour along the main routes in the outlying parts of the African Colonies.
    Colonel Stanley: As the reply is necessarily long, I will, with my hon. and gallant Friend's permission, circulate it in the OFFICIAL REPORT.
    Following is the reply:
    As regards the provision of rest camps for migrant labour in the Gold Coast, I have nothing to add to my reply of 2nd June, 1943, except to say that it is not considered that there is any need at present for the further development of the arrangements which I then described As regards Uganda, I would invite the attention of my hon. and gallant Friend to the reply given to the hon. Member for West Leyton (Mr. Sorensen) on 2nd February this year, relating to the provision of accommodation on the main road to the Belgian Congo.
    The Government of Tanganyika have built three additional labour camps this year, and 13 small camps or shelters have been established between some of the main camps. It is intended to complete a further 21 small camps during 1944.
    The Governments of Northern Rhodesia and Nyasaland have continued to give close attention to the improvement and extension of amenities for travelling natives. In Northern Rhodesia nine new rest camps were built in 1942 on the route from Barotseland to Livingstone, while camps have also been provided on the Great North Road for the use of motor transport passengers. The construction of further camps continued during 1943 and three rest camps were completed in the Kaonde-Lunda Province, four more were built on the Great East Road and two on the motor road linking the Barotse Province with the Lusaka area. I regret that I have no details of recent progress in Nyasaland.

    Development Commissions
    Mr. Rileyasked the Secretary of State for the Colonies whether he has under consideration any scheme for the establishment of similar development commissions for West and East Africa, respectively, as the Stockdale Commission now operating in the West Indies.
    Colonel Stanley: No, Sir.

  NYASALAND (BROADCASTING STATION)
  Colonel Lyonsasked the Secretary of State for the Colonies whether he can see his way to grant a loan from the Development Fund for the installation of a broadcasting station at a suitable centre in Nyasaland.
  Colonel Stanley: I have not yet been asked by the Nyasaland Government for any assistance under the Colonial Development and Welfare Act for the installation of a broadcasting station in Nyasaland.

  MALTA (INFANTICIDE)
  Miss Wardasked the Secretary of State for the Colonies whether, in view of the recent decision of the Malta courts arising out of the case of Victoria Micallef that the criminal law of Malta did not include provisions similar to the Infanticide Act of the United Kingdom, steps will be taken to amend the law.
  Colonel Stanley: A Bill for this purpose is being drafted and will be introduced in the Malta Legislature as soon as possible.
  Miss Ward: Will my right hon. Friend look at the position in other Colonies in regard to that matter?
  Colonel Stanley: Yes, I have that in mind.

  RAILWAYS

    Messrs. Thomas Cook and Son, Ltd.
    Mr. Bowlesasked the Parliamentary Secretary to the Ministry of War Transport in what circumstances the railway companies became the owners of Messrs. Thomas Cook and Son, Limited.
    The Parliamentary Secretary to the Ministry of War Transport (Mr. Noel-Baker): In 1940, the share capital of Thomas Cook and Son passed to the Custodian of Enemy Property. After negotiations, the custodian sold the share capital to Hays Wharf Cartage Company, Hays Wharf, as a subsidiary of the four main line railway companies. The purpose of the agreement was to carry on the business of Thomas Cook and Son as a going concern under British control. The Railway Companies (Thomas Cook and Son,

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    Ltd., Guarantee) Act, 1942, authorised the railway companies to give guarantees and to make the other financial arrangements which were required.
    Mr. G. Strauss: May I ask the Minister whether the shares of Thomas Cook and Son, Ltd., were offered to anybody else? Were they put on the market, or was there direct negotiation? Did anybody else have an opportunity of buying those shares?
    Mr. Noel-Baker: I would like notice of that Question. I am afraid I do not know the exact facts.
    Sir Frank Sanderson: Is it not a fact that this is a matter entirely between Thomas Cook and Son and the railway companies interested?
    Hon. Members: No.
    Mr. Noel-Baker: No, it belongs to the Custodian of Enemy Property.

    Air Lines
    Mr. Bowlesasked the Parliamentary Secretary to the Ministry of War Transport what resources the railway companies have which would be sufficient to face the loss that would fall upon those companies if they ran air lines; and what is the source from which such resources derive.
    Mr. Noel-Baker: The Railway Companies' Air Transport Acts of 1929 authorise the companies to use their funds for air services, and would permit the use of undistributed profits to meet any (initial) loss in which the provision of such services might result.
    Mr. Bowles: Will my hon. Friend tell the House what these reserves amount to, because on 12th October, in another place, a certain Noble Lord referred to these reserves as being quite capable of sustaining losses over many years, if the railways companies chose to run air lines?
    Mr. Noel-Baker: I will not commit myself to the figure now, but if my hon. Friend will look at the figures of the published accounts of the railway companies, he will see that they have large funds for this purpose.
    Mr. Bowles: Then, why should they rely on Government funds?
    Sir O. Simmonds: Is not the question based on a wrong hypothesis, and is it not the case that private air lines, through their efficiency, are run at a profit and that it is State air lines that are run at a loss?
    Mr. Speaker: I think that that is another question.

  ROADS

    Accidents
    Squadron-Leader Sir Gifford Foxasked the Parliamentary Secretary to the Ministry of War Transport the number of accidents in which American transport has been involved, in the country in general and in Oxfordshire, in particular, since 1st January, 1944; and whether steps are taken to warn American drivers of the dangerous surface of many British roads in the autumn.
    Mr. Noel-Baker: I am making inquiries and will communicate with my hon. and gallant Friend.
    Sir G. Fox: Is the Parliamentary Secretary aware that the standard of driving of American vehicles is steadily deteriorating; that casualties on the road are increasing, especially at night; and what are the American authorities doing to stop this slaughter?
    Mr. Noel-Baker: The American authorities have helped us in every possible way by helping their drivers to adapt themselves to our conditions, which are very different from those in the United States. I would not at all accept my hon. and gallant Friend's assertion that casualties have been increased.
    Mr. A. Edwards: Cannot arrangements be made to reduce their speed?

    Requisitioned Lorries (Re-Purchase)
    Mr. Keelingasked the Parliamentary Secretary to the Ministry of War Transport whether the former owners of requisitioned lorries will be given the opportunity to buy them back direct from the requisitioning authority.
    Mr. Noel-Baker: I understand that my hon. Friend has particularly in mind the re-purchase of lorries acquired by local authorities for Civil Defence. My right hon. Friend the Minister for Home Security has recently made arrangements

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    with local authorities about the disposal of Civil Defence vehicles which are no longer required. Under these arrangements if a former owner desires to buy back his lorry, he should inquire from the local authority whether the vehicle is for sale and is in serviceable condition. If these conditions are fulfilled, he should then apply to the Regional Transport Commissioner for permission to buy.
    Mr. Keeling: Does that mean that his request will be granted if those conditions are fulfilled?
    Mr. Noel-Baker: Provided he has a need for a vehicle which he can use in the public interest. Certainly, in the circumstances which my hon. Friend outlined to me in the letter he wrote, the Regional Transport Commissioner would endeavour to do what was asked.
    Mr. Keeling: If a request is not made until after the war, must it then be in the public interest?
    Mr. Noel-Baker: Yes, Sir, it is under the Acts of Parliament.

  ACCESS TO BEACHES (PROSECUTION, LITTLEHAMPTON)
  Sir Herbert Williamsasked the Attorney-General whether he intends to prosecute Captain Vivian H. T. Davison, staff officer, sub-district, including West Sussex, for having stated on oath, at Littlehampton Police Court, on 21st August, that mines were sown in the beach at East Preston, since it is now known that no mines were ever sown in this beach.
  The Attorney-General (Sir Donald Somervell): I am making inquiries and would be grateful if my hon. Friend would put down the Question again next week.
  Mr. Bowles: Can the Attorney-General say whether any further proceedings are contemplated against the hon. Member for South Croydon (Sir H. Williams)?
  Sir H. Williams: Is the hon. Member aware that this prosecution related to a learned judge, and a number of others, and not to the hon. Member for South Croydon?

  PUBLIC HEALTH

    Tuberculosis Patients, Monmouthshire
    Sir C. Edwardsasked the Minister of Health the number of tubercular patients awaiting entrance to Cefn Mably hospital, Monmouthshire; if he can state the average waiting period for such patients; and what steps are being taken to make further provision and accommodation for these patients.
    Miss Horsbrugh: I am informed that there are 16 men and 65 women on the waiting list for admission to this hospital. The present average waiting period for these patients is two months for the men and seven months for the women. Work is now in progress at the hospital which will provide an additional 48 beds.
    Dr. Edith Summerskill: Does the hon. Lady realise that during the months that women are waiting, they are infecting their own children; and will she consider taking some action in this matter, in order to expedite the reception of these patients in hospital?
    Miss Horsbrugh: I have already said that 48 additional beds are being provided there, and 48 additional beds at another sanatorium, and that an additional provision of 60 beds is being made at Chepstow.

    Dairymen, Brighton (Registration)
    Flight-Lieutenant Teelingasked the Minister of Health if he is aware that considerable hardship is being inflicted On small retail dairymen in Brighton, due to the cancellation of licences by the local health committee, as demanded under Section 22 of the Food and Drugs Act, 1938; whether he is aware that these dairymen cannot carry out the alterations and improvements required because of the war; whether the health committee is compelled enforce the regulations; and whether, in view of the exceptional conditions, due to the war, he will take action in the matter.
    Miss Horsbrugh: My right hon. and learned Friend has no information with regard to the particular instances referred to, but under Section 22 of the Food and Drugs Act, 1938, when a local authority refuse or cancel the registration of a dairyman, an appeal lies to a court of summary jurisdiction and my right hon. and learned Friend has no power to intervene in the matter.

  WAR CORRESPONDENTS
  Sir T. Mooreasked the Secretary of State for War how many British and American war correspondents are allotted to each theatre of war, respectively.
  The Secretary of State for War (Sir James Grigg): I am circulating the figures asked for by my hon. and gallant Friend in the OFFICIAL REPORT.
  Sir T. Moore: If, as I assume, all these war reporters are given full facilities for reporting freely for the United States and this country, why is it that my right hon. Friend said that so much more publicity is given to the activities of American troops, than to those of British and Imperial troops?
  Sir J. Grigg: This is a request for figures, and if my hon. and Gallant Friend wants to ask about something which is not contained in those figures, perhaps he will put down a question.
  The figures are as follow:

  LIBERATED COUNTRIES (VITAMINISED CHOCOLATE)
  Major Petoasked the Secretary of State for War whether he is aware that 23,000 tons of vitaminised chocolate specially made for under-nourished children in Europe has lain for a year past in a factory; and will he try to assure its despatch to liberated Europe, especially Greece.
  Sir J. Grigg: This stock was accumulated for relief purposes and some of it has already been sent for use overseas. The rest will be used to meet the needs which arise in various liberated countries, including Greece.
  Major Peto: While I thank my right hon. Friend for his answer, is he aware that the total cost of the chocolate is £2,750,000, that 20,000 tons of this vita-
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  min chocolate are still being stored in places needed for other purposes, and that the storage costs £500 a week; and will he, therefore, use his well-known proclivities for common sense in order to get the chocolate released, so that somebody can eat it and so save paying £500 a week for its storage?
  Sir J. Grigg: It will be used as, soon as it is called forward. It cannot be stored in the Middle East because it does not keep in temperatures of over 80 degrees, and, therefore, the only alternative is to store it in the West.
  Major Peto: Is my right hon. Friend aware that this chocolate has now been stored for over a year at this great cost to the public?
  Dr. Morgan: Can the right hon. Gentleman assure the House that the vitamins are still in this chocolate?

  CLOSED PREMISES (RE-OCCUPATION)
  Mr. Rostron Duckworthasked the Minister of Town and Country Planning whether members of the Forces, and others, whose houses or business premises have been closed owing to absence on service or scarcity of tenants owing to evacuations and other causes incidental to the war, have to apply to the appropriate town planning authority for permission to re-occupy the premises after they have been closed for more than 18 months; and whether such owners or occupiers will have lost their right to compensation if the premises are subsequently closed by the planning authority under the provisions of any town planning scheme.
  The Parliamentary Secretary to the Minister of Town and Country Planning (Mr. Henry Strauss): On the basis of the existing law the answer to both parts of the Question is Yes, Sir. My right hon. Friend is, however, considering whether Clause 41 of the Town and Country Planning Bill (as amended in Committee) should be extended to meet the type of case referred to by my hon. Friend.
  Colonel Lyonsasked the President of the Board of Trade whether, to remove doubt upon the safeguards afforded to the proprietors of one-man businesses who have been called up for war purposes and whose premises have been closed for

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  a period over 18 months, he will consult with the Minister of Town and Country Planning so as to establish that the protection afforded to those persons will not be prejudiced by any construction of Clause 41 of the Town and Country Planning Bill.
  The Parliamentary Secretary to the Board of Trade (Captain Waterhouse): I would refer my hon. and gallant Friend to the reply given to-day by my right hon. and learned Friend the Minister of Town and Country Planning to my hon. Friend the Member for Moss Side (Mr. Rostron Duckworth).
  Colonel Lyons: Will action be taken almost immediately?
  Captain Waterhouse: Yes, Sir, in another place.

  ROYAL ORDNANCE FACTORIES (INDUSTRIAL AGREEMENTS)
  Mr. Summersasked the Minister of Labour what arrangements regarding holidays and payments for work or authorised leave of absence have been agreed with representatives of workers in Royal Ordnance factories covering the period immediately following the cessation of organised resistance by Germany; and whether he has any general guidance to offer to those negotiating similar arrangements in the general industrial field.
  The Joint Parliamentary Secretary to the Ministry of Labour (Mr. Tomlinson): My right hon. Friend is not in a position to make any statement on this matter at present.
  Mr. Summers: Will the hon. Gentleman give an assurance that, as soon as the negotiations referred to are complete, he will make them available to the advantage of those affected?
  Mr. Tomlinson: Yes, Sir.

  DIRECTOR OF PUBLIC PROSECUTIONS
  Sir H. Williamsasked the Secretary of State for the Home Department when a new Director of Public Prosecutions is to be appointed.
  The Parliamentary Secretary to the Ministry of Home Security (Miss Wilkinson): As my right hon. Friend
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  announced last week, he has now appointed Mr. Theobald Mathew to this post.
  Sir H. Williams: Can the hon. Lady say whether this gentleman has had the customary experience of those who are appointed to this important office? Is not this the first time that a person other than a barrister has been appointed?
  Miss Wilkinson: The Prosecution of Offences Act, 1908, provides that either a solicitor or a barrister may be appointed. The gentleman in question is a member of a famous firm of City solicitors. He came to the Home Office during the war as a temporary civil servant only. He did so brilliantly that he was made the head of the Criminal Division, so my right hon. Friend the Home Secretary considered that he was the best man available for the position.

  BRITISH AND COLONIAL INCOME TAX
  Captain Cobbasked the Chancellor of the Exchequer whether he will give early consideration to a re-allocation as between the British and Colonial Treasuries of taxation on the profits made by companies operating in the Colonies and registered in Great Britain.
  The Financial Secretary to the Treasury (Mr. Assheton): I assume that my hon. Friend's Question refers to the scheme for the relief of double taxation within the Empire. As my right hon. Friend the Chancellor of the Exchequer previously stated, we may make an arrangement with the United States on somewhat different lines from the Empire scheme, and in that event, as I pointed out during the Finance Bill Debates last June, it will clearly be necessary to consider the repercussions on the Empire scheme. My right hon. Friend is not, however, in a position to make any further statement at present.
  Captain Cobb: Is it not a fact that these profits are not taxed in the Colonies, and that the Colonies derive no benefit at all from these profits earned in the Colonial territories?
  Mr. Assheton: No, Sir; that is not quite the position. It is, however, a most complicated matter and would involve a very lengthy explanation.
  Captain Cobbasked the Chancellor of the Exchequer whether holders of British Colonial stock resident in Great Britain pay full British Income Tax on dividends derived from this stock but pay no income tax to the Colony which issued the stock.
  Mr. Assheton: A person resident in the United Kingdom is liable to United Kingdom Income Tax on his total income from all sources, subject to the qualification that the assessment on income from sources outside the United Kingdom is based on remittances to the United Kingdom instead of on the full amount arising abroad in the case of a person not domiciled in the United Kingdom or a British subject not ordinarily resident in this country. Whether dividends on holdings of Colonial Government stocks are liable to Colonial tax in the hands of a United Kingdom resident would depend on the terms of issue of the stock and the Income Tax law of the Colony concerned, but I understand that generally speaking such dividends are exempted from Colonial Tax in the hands of a person not resident in the Colony.

BUSINESS OF THE HOUSE
Mr. Arthur Greenwood: May I ask the Prime Minister if he can make any statement with regard to the procedure to be adopted on Friday?
The Prime Minister: We have got the Diplomatic Privileges (Extension) Bill out of the way and therefore I think it might be convenient if, on Friday, I made a short statement on the Adjournment. That will allow questions to be put, but I trust there will not be a lengthy Debate, because there is another matter coming on—a Debate on Housing Repairs in London and south-East England—which will suffer by any inroads that may be made upon it by this preliminary discussion. As, however, there will be an opportunity of replying to anything I may say, I shall not feel myself under any particular restrictions about non-controversial topics.
Mr. Greenwood: Of course it is perfectly clear that on the Adjournment a statement would be debatable, but I gather that my right hon. Friend's view is that the Debate ought not to be prolonged.
The Prime Minister: I hope not.
Mr. Greenwood: May I, however, repeat the caveat which I entered yesterday, that that does not necessarily close the door—and my right hon. Friend must not give me the same reply he gave me yesterday—to a Debate at a later stage?
The Prime Minister: Exactly.

HOUSE OF COMMONS (REBUILDING)
Report from the Select Committee, with Minutes of Evidence and Appendices, brought up, and read; to lie upon the Table, and to be printed. [No. 109.]

MESSAGE FROM THE LORDS
That they have agreed to,—
Unemployment Insurance (Increase of Benefit) Bill, without Amendment.

BUSINESS OF THE HOUSE
Ordered:
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House).
"That, nothwithstanding the practice of the House, the Consolidated Fund (Appropriation) (No.2) Bill may be considered in Committee immediately after the Bill has been read a Second time."—(The Prime Minister.]

ORDERS OF THE DAY

  TOWN AND COUNTRY PLANNING (Re-Committed) BILL
  Considered in Committee. [Progress, 19th October.]
  [Major MILNER in the Chair]
  NEW CLAUSE.—(Assessment Of compensation in connection with acquisition of land for public purposes by reference to 1939 prices.)
  (1) Compensation for the compulsory purchase of an interest in land by a government department or a local or public authority within the meaning of the Acquisition of Land (Assessment of Compensation) Act, 1919, compensation to be estimated in connection with such a purchase for damage sustained by reason of the severing of land the subject thereof from other land held therewith or otherwise injuriously affecting such other land, and compensation under section sixty-eight of the Lands Clauses Consolidation Act, 1845, in respect of land injuriously affected by the execution of works on land acquired by such a department or authority, shall, except in the case of compensation assessed on the basis specified in rule (5) of the rules set out in section two of the said Act, be assessed subject to the rule following, that is to say—
  The value of any interest in land purchased pursuant to a notice to treat served at any time within the period of five years from the commencement of this Act, the amount of any damage sustained by reason of severance or other injurious affection compensation for which is to be estimated in connection with a purchase of an interest in land pursuant to such a notice, and the amount of any damage sustained by reason of other land being injuriously affected by the execution of works which either is sustained or the amount of which falls to be ascertained at any time within that period, shall be ascertained by reference to prices current at the thirty-first day of March, nineteen hundred and thirty- nine, on the assumption that the interest had at that date been subsisting as it was in fact subsisting at the time of service of the notice to treat, and that the land in which the interest subsisted, and any such other land,
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  had been at that date in the state in which it in fact was at the time of service of the notice to treat.
  (2) The rule set out in the preceding subsection shall, in its application to tenancies, to land capable of being redeveloped in combination with other land and to dwelling-houses to which the Rent and Mortgage Interest (Restrictions) Acts, 1920 to 1923, apply, have effect subject to the provisions of the Schedule (Application of rule as to assessment of compensation) to this Act.
  (3) Compensation for disturbance shall not in any case be assessed at any greater amount than that at which it would have fallen to be assessed if this section had not been enacted.—[The Chancellor of the Exchequer.]
  12 noon.
  The Chairman: I propose to call the Amendment standing in the name of the hon. Member for Walsall (Sir G. Schuster)—in line 13, leave out "five," and insert "two"—and to suggest that the Committee should discuss at the same time, the next Amendment on the Paper in the name of the hon. Member for Peckham (Mr. Silkin)—in line 13, leave out from "time," to the second "of," and insert:
  "before the expiration of the period of five years from the date appointed in pursuance of subsection (1) of section one."
  Sir George Schuster: I beg to move, in line 13, leave out "five," and insert "two."
  My Amendment is a very brief but important one, and in support of it I wish to make three points. First I would say that the more I study this matter, the more I feel that this cannot be accepted as a fair Measure. Secondly, I cannot accept it as the best Measure which is practicable. I fully recognise the immense difficulties of finding a satisfactory Measure, and no one would he more ready than I to acknowledge that a very great attempt has been made to devise a fair Measure. I still believe, however, that a better Measure could be devised if more time were given, and if this very thorny subject could be studied in a judicial rather than in a political atmosphere. I believe that it would be possible to devise a Measure which would give better justice to individuals and be consistent with the public interest, and would command general support from the Committee.
  My third point is that I believe the plan, as it stands, will, in practice, fail to achieve its object. The result as I see

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  it will be to create a standard of prices applicable to properties which are acquired by the public authorities which is likely to be extremely different from the standard of prices at which properties will be bought and sold in the market during the operation of this Bill. We have to look forward to five years, probably to 1950, and I do not believe that the position created by this Bill can be maintained as long as that. In those circumstances, all experience goes to prove that the local authorities will shrink from exercising their powers, and this Bill, if my appreciation is correct, may really kill planning. Having those feelings, I venture to suggest that it would be very wise to ensure a review of the provisions after a much shorter period than five years. What I am saying assumes, of course, that the plan will go through as proposed by the Government. I, myself, have tried to suggest an alternative, embodied in an Amendment which is on the Order Paper. I hope to be allowed later to argue in favour of that alternative; therefore I will not refer to it now. I would say this, however, that even if the alternative which I shall propose were adopted, I should still think that the whole subject ought to be brought under review after a comparatively short period. I believe that within two years we may have something like a normal market, and I think we should give ourselves a chance of approaching the matter again.
  Mr. Silkin: I had hoped that it would have been possible to have had a separate discussion on the Amendment in my name, and I hope it will still be possible for the Committee to arrive at a separate decision on it. As I understood the argument of my hon. Friend the Member for Walsall (Sir G. Schuster) he considers the compensation Clauses bad, and suggests, therefore, that the period of this badness should be reduced from five years to two. We, on this side of the Committee, do not accept his view. We think that while the compensation Clauses go further than we would have wished, yet in substance they do justice to all sections of the community, including those who are going to pay, as well as the property-owners. May I, in passing, refer to one statement made by my hon. Friend? He said that local authorities
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  will shrink from exercising these powers because, presumably, they think they are unjust to property owners. I am in a position to know what the local authorities really think, and I can assure him at once that they think that these provisions are, if anything, too generous to the property-owners, and not that they are ungenerous. Therefore, they will certainly not shrink from exercising these powers for fear of doing an injustice to the property-owners.
  I wish next to deal with the Amendment in my name and the names of several of my hon. Friends on this point to which reference has already been made. In the Bill as originally presented to the House, the period in which local authorities were to have the benefit of expedited procedure was five years from the commencement of the Act. The period in which local authorities were to have the benefit of acquiring land in accordance with the provisions of the Bill, was also five years from the commencement of the Act. In both cases the period terminated at the same time. Representations were made on that point on the Second Reading, and strong representations were also made by local authorities who pointed out that to date the operation of the Bill, on both these counts, from the period of the commencement of the Act, was to give an uncertain effective period. A portion of the five years will, unfortunately, be taken up by the war and it will be some time before local authorities can actually begin to function. Therefore, there was no effective period of five years. I thought the Minister saw the force of that, because he introduced an Amendment to Clause 1, under which the period of five years was to date from an appointed day to be fixed after consultation with the local authorities.
  It now appears that this period of five years from the appointed day will apply only to the expedited procedure, and that, so far as the compensation Clauses are concerned, the five years will still run from the commencement of the Act, if the Clauses are accepted as they are. I think that is unfortunate, unfair and impracticable. If the Clauses remain as they are local authorities will not get an effective period of five years in which to carry out their acquisition under the terms of this Bill. In the first place, quite obviously, nothing can be done until the appointed day, and I would ask the Com-

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  mittee to remember that the appointed day is the day when the Minister is of opinion that the operation of this Measure can begin. Until then, little can be done. I will not pretend that no acquisition can take place—of course, some can—but the main purposes of this Bill cannot begin to be carried out until the appointed day. I submit that when that day is fixed, in view of the lengthy procedure which is required under this Bill, it will be at least one year before local authorities will be in a position to give notice to treat. If I may venture a guess—and it is only a guess—it may well be a year before the appointed day is fixed. Therefore, the effective period during which the main body of acquisitions can take place will be three years, and not five.
  What is the position during these three years? The Chancellor of the Exchequer recently explained, and with great force, I admit, that there would be no effective market in land during the next five years. I would go further and say that there will be no effective market for at least five years from the appointed day. We have to visualise what will be the state of affairs during this five years. We shall probably still be at war with Japan at the appointed day, and for some uncertain period afterwards. War production will be going on in different parts of the country, and this will affect the value of land. There will be gradual demobilisation, and there will be a great shortage of accommodation. It is obvious that, in certain cases, exceptionally high prices will be demanded and obtained for property. During that period of five years from the appointed day there will be no real effective and normal market. Therefore, it would be right that the period of special compensation provisions should be five years from the appointed day, in the same way as for the expedited procedure.
  Supposing this period remains, as it is now in the Bill, local authorities will still be able to carry on expedited procedure under Clauses 1 and 2 and Clauses 9 and 10. They will still be expected to carry out a good deal of redevelopment of areas of extensive war damage, because the Minister has satisfied the Committee that in the large majority of cases, they will not be able to achieve it in less than five years. They will, therefore, still be under an obligation to carry out their redevelopment of such areas at the end of three or three-and-a-half years, when they
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  will possibly have to pay inflated and abnormal prices for the land they require. That may deter local authorities from completing the redevelopment of areas of, extensive war damage. I do not suggest that this should weigh conclusively with the Committee, but I know that local authorities attach great importance to the period of five years for compensation provisions to run from the appointed day, as well as the expedited procedure. They were certainly under the impression that my right hon. Friend's Amendment to Clause 1, would also be applied to the compensation Clauses. I hope the Minister will see his way to accept the Amendment which stands in my name.
  The Minister of Town and Country Planning (Mr. W. S. Morrison): I am grateful to my hon. Friend the Member for Walsall (Sir G. Schuster) for raising at an early stage to-day a subject which is of great interest to both sides of the Committee in the consideration of these Clauses. The Committee have just heard the hon. Member for Peckham (Mr. Silkin) express the view that five years from the passing of the Act would be too short a period in which to make adequate preparations for reconstruction. On the other hand, my hon. Friend the Member for Walsall is of opinion that five years is too long and it will be no surprise if I suggest that the truth is to be found midway between these two extreme propositions, namely, that two years will be too short, and that the indefinite prolongation of this market which we are fixing by reference to 1939 prices, would be not in the public interest. I am grateful to my hon. Friend the Member for Walsall for the judicial attitude in which he commended his Amendment, and advised the Committee to adopt, and also for enabling me to make a statement on this matter which, I think, will be of some help in clarifying this matter.
  I have heard that some of my hon. Friends base their criticism of these Clauses upon a misconception of the permanence of their operation. It is thought that we are here effecting some change of a lasting character in the principles which govern compensation for the compulsory acquisition of land. Such is not the purpose of this Clause. This Parliament has no mandate to make permanent changes in the laws affecting property, but this Parliament is confronted with the duty of making preparations for the period

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  of transition and reconstruction, which will immediately follow active fighting. In that period it will be necessary to acquire land for public purposes. The general law is that such land should be bought for current market value, but that criterion of value is not open to us, because current transactions are vitiated by all sorts of war considerations of a temporary and distorting character.
  12.15 p.m.
  Therefore, in the interests of justice, we are driven back to the most recent free market for our guide as to what should be paid. When we have passed through the dislocated years it will be open to other Parliaments to make provisions for these as for many other things, guided by the will of the people; but situated as we are it is our duty to make the best temporary provision that we can, without binding any person or party as to the future—and who can bind Parliament?—to secure that local authorities and the public shall know where they stand, that they may have a working basis on which to carry out necessary plans of reconstruction without delay. This is the immediate practical task which confronts us. It is a duty arising from circumstances which are without precedent, and the discharge of that duty by the ad hoc method of these Clauses does not necessarily govern our legislation either way in later times.
  To come specifically to my hon. Friend's Amendment, this Bill must be seen in its proper context in relation to the larger proposals governing the use of land which have been adumbrated by the Government in the White Paper on the control of land. The House has not yet had an opportunity of discussing those proposals, and I hope that an opportunity will arise early in the new Session, so that we may hear the views of hon. Members upon them, but it is clear that a period will be required for the discussion of such far-reaching proposals, and that the legislation to embody them will be of a long, contentious and difficult character. Therefore we ought, in order that the work of reconstruction may not be prejudiced and vitiated by doubt and uncertainty, to make provision for a period which is adequate to enable the whole question to be considered by Parliament and the necessary legislation, on a proper basis, passed through with the
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  consent of hon. Members. I am hopeful about these things, I remain an optimist, but I think that to tie ourselves down to two years would be unduly to add to the uncertainties of the situation in which we find ourselves. Therefore, I say that five years is the right period.
  May I say a word to my hon. Friend the Member for Peckham (Mr. Silkin), who spoke to the substance of his Amendment which is, indeed, inter-related with this question. His Amendment has the effect of making this period of five years for the temporary market control to run from the appointed day mentioned in Clause 1 instead of from the passing of the Act. I think my hon. Friend has in mind that by his Amendment, if it were accepted, he would prolong somewhat the period during which this standard would operate, but, in fact, it would not prolong the total period, but merely defer the date from which it starts. One of the difficulties of this problem is that the Clauses we are now considering affect not only purchases under this Bill but all purchases for a public purpose.
  Mr. Silkin: I think my right hon. Friend has rather misread the Amendment. The effect is to make the five years run from the appointed day, but the Amendment will, in fact, also be retrospective. It will start from the passing of the Act.
  Mr. Morrison: With respect, I do not think treat I have misunderstood the effect of the Amendment. The point I would put is that immediately on the passing of this Bill there will be public purchases of land, or there may be, for all sorts of purposes quite unconnected with this Bill—for purposes of housing, one of our most urgent public needs, or, it may be, for Service purposes. My right hon. Friend the Member for Devonport (Mr. HoreBelisha) informed us the other day of an impending transaction in his own constituency which has nothing to do with this Bill. The disturbed market which is the sole justification, and the real justification, for these proposals does not begin at the appointed day, it is with us now, and therefore the best advice I can give the Committee is to let the matter stay as it is in the Bill. In other words I suggest that as soon as this Bill is passed this standard, which we believe to be more just than current market values at the present time, shall begin to operate for all public purposes.

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  I ask the Committee not to accept the Amendment of my hon. Friend the Member for Walsall. It is true that we have to see how we get on. My hon. Friend the Member for Peckham made some very intelligent forecasts, if he will forgive my saying so, of what the conditions in the property market may be, but the wisest of us know that in that matter we are in the realm of conjecture. We do not know, and we had better see how we get on and act accordingly in the circumstances of the time. In other words, for the purposes of this Bill and for other public purchases of land which has to be acquired compulsorily I ask the Committee to provide me with an umbrella which is durable enough to last five years, because it is always open to Parliament to pull down the umbrella at any time if it stops raining.
  Mr. John Wilmot: Before the right hon. Gentleman leaves that point may I invite his attention to two aspects of the matter? He has not referred to the gap which will occur between the period of operation of the powers and the period of operation of the compensation arrangements in relation to those powers. There will be a gap, because one period starts from the appointed day and the other period starts from the passing of the Act, and that gap may be long or short according to when the appointed day is fixed. Therefore, I think great administrative difficulties will be created by giving the local authorities powers for one period and compensation provisions for a shorter period. He dealt with the difficulties which he thought lie in the Amendment of my hon. Friend the Member for Peckham (Mr. Silkin), but, with all respect to my right hon. Friend's well-known legal knowledge, if he looks at the Amendment as it is drafted he will see that it is not true to say that it will begin to be effective immediately, because it will have regard to notices to treat served before the appointed day. Therefore, any notices served before the appointed day would, it seems to me, be covered by the Amendment, and I suggest that it would make for administrative tidiness, at any late, if his Amendment were accepted, so that the two periods run concurrently.
  Sir G. Schuster: In order to save time I shall ask leave to withdraw my Amendment, but I should like to make a few observations. In the first place I should
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  like to express my very great gratitude to my right hon. Friend for the statement which he has made. To my mind it was one of the best statements made from the Government front bench during the whole of the discussions upon this Bill. My own fears about this Measure are greatly diminished by the categoric statement that this is not regarded as setting a precedent, that it is an ad hoc Measure dealing with specially disturbed circumstances and the possibility of its review is contemplated. That exactly meets my point, and I am most grateful to my right hon. Friend. The only other thing I wish to say, to my hon. Friend the Member for Peckham (Mr. Silkin), who, I freely acknowledge, has a far greater knowledge of the operations and points of view of local authorities than I have, is that I should like to impress upon him that it was not at all in my mind to diminish the powers of local authorities to carry out planning schemes. I may be too pessimistic in my view of how this standard of values is likely to work in comparison with current values, and he may be right, but I saw a danger and I thought it would be wise to provide for a definite period of review before too long, but I fully support his idea that planning authorities should have ample power to carry out proper plans at the earliest opportunity and in the most effective way. I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. Silkin: I beg to move, in line 13, leave out from "time," to the second "of," and insert:
  "before the expiration of the period of five years from the date appointed in pursuance of subsection (1) of section one."
  I do not think I need to say anything more than I have already said in support of this Amendment, except that I am by no means convinced by what my right hon. Friend has said: Therefore I move the Amendment formally.
  Amendment negatived.
  Mr. Hore-Belisha: I beg to move, in line 20, after "thirty-nine," insert:
  "increased by such sum as the Treasury shall determine to be equal to the amount by which having regard to the economic conditions affecting the interest in such land the value thereof has increased since that date."
  Lieut.-Colonel Dower: On a point of Order. The Amendment follow-

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  ing this one and standing in the name of myself and some of my hon. Friends is very similar in character—in line 20, after "thirty-nine," insert:
  "and
  (b) with the addition of such percentage of the value or amount so ascertained as may be determined by the Treasury and prescribed by order made by them if it shall appear to them that, having regard to circumstances arising since the thirty-first day of March, nineteen hundred and thirty-nine, the prices current at that date are inadequate."
  I should like to ask, Major Milner, whether it could be discussed at the same time.
  The Chairman: Yes, I think that would be for the general convenience of the Committee.
  Viscountess Astor: I would like to draw the attention of the Committee to something that is positively alarming. Here we have one of the ablest Members of the House of Commons coming here with a speech, although he did not understand what was in the Bill—
  Hon. Members: Order!
  Mr. Geoffrey Hutchinson: On a point of Order. There is an Amendment on the Order Paper in my name and the name of my hon. Friend the Member for South Croydon (Sir H. Williams) which deals with this matter—in line 29, at end, insert:
  "(3) If at any time any order is made under section eleven of the War Damage Act, 1943 (Power to increase amount of value payments) directing that the amount of value payments in any cases or classes of cases which would otherwise have been computed as provided by that Act, shall be increased by a sum equal to such proportion of the amount computed in accordance with that Act as may be specified in such order the Minister may by order direct that the compensation payable under this Act shall be in the like cases or classes of cases be increased by a sum equal to a like proportion of such compensation."
  May I ask whether we should be in Order in discussing that Amendment at the same time as the Amendment which has just been moved?
  The Chairman: I had proposed to call the hon. and learned Gentleman's Amendment separately, but if he chooses to discuss it on this Amendment, I shall have no objection.
  Mr. Hutchinson: If it is your intention to call it I think it would be more convenient if it were not discussed now.
  Mr. Hore-Belisha: The fact that my right hon. Friend the Minister has raised an umbrella so early in the proceedings, shows that he expects inclement weather. The fabric of which his apparatus was constructed may help to weather the worst elements of the storm, but, nevertheless, will leave a number of the victims very damp. The troubled waters will penetrate and prevail despite the oil which my hon. Friend the Member for Walsall (Sir G. Schuster), had so ready at hand. This is the last occasion on which we shall have an opportunity of examining the compensation code which is to prevail, as we have been told, not only for the purposes of this Bill, but for all compulsory acquisitions of property for five years after the commencement of this Act. It may be five years after the termination of the war with Germany. That is a long time ahead. We are fixing a compensation code and we are trying co-operatively—for that was the spirit in which the changes were offered—to devise the best and fairest attainable code. The code must, presumably, be based upon some principles which are understandable and defensible. The central principle on which the code is to be based is defined in this Clause, which was explained last week by my right hon. Friend the Chancellor of the Exchequer.
  12.30 p.m.
  He did not justify this Clause on the ground of expediency or upon the ground that any other Clause would cost too much, or that it was a compromise. He justified it on the basis that it was the best attainable Clause. He said:
  "It is a principle of our law, well-established and well-recognised, that when private property is taken compulsorily for a public purpose…fair compensation should be paid…."
  and:
  "Fair compensation is usually interpreted, according to our practice, as compensation based upon the current market value…. I, myself, would unhesitatingly support that principle."
  He maintained that there was no violation of that principle in this Clause. He said if there appeared to be a violation it was because Lex non cogit ad impossibilia, and there was no means of approximating more closely to market value than by

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  taking the 1939 standard. I will read the words:
  "The reason why the 1939 standard is being adopted"—
  that is, rather than the market value standard—
  "here is that there is, in fact,…under the disturbed conditions of war, no firm basis of current value on which one can rely."—[OFFICIAL REPORT, 19th October, 1944; Vol. 403; cc. 2565 and 2569.]
  Therefore, we have this as the position of the Government. They accept that fair compensation should be paid in accordance with the traditional principle—the fair market value. They cannot, in this case, incorporate in the Bill the phrase "market value," or the legal phrase which represents that, because there is, in fact, no market value, and the last firm basis to which dealings could be related was that of 1939. That is the position of the Government. In the very next Clause they show the injustice of what they are doing. They say, "Ah, well, it would be a hardship to impose this upon certain classes of the population; therefore, we will raise them 30 per cent. above." I am going to appeal to my right hon. Friend, if he stands by his words, to accept this Amendment because this Amendment gives effect to what he himself said was a just basis. It suggests that we should insert, after 1939, words which would commit the purchasing authority to pay a price based on the 1939 value, modified by the changed economic conditions, that have intervened. That proposal was contained in the Clause which was withdrawn by the Government.
  In making the concession to the rent-restricted owner-occupier, they said that they would increase the 1939 value by a prescribed percentage—not 30 per cent.—related to the economic conditions. That is the purport of my Amendment, and the first claim I make is that it carries out what my right hon. Friend said the Government desired to do. The second ground on which I justify it is this. These Clauses are based, or purport to be based, upon the Uthwatt Report. The Uthwatt Report recommended in the interim report of the 25th April, 1941:
  "The Government should now announce, as a general principle, that the compensation ultimately payable in respect of public acquisition of land will not exceed sums based on the standard of pre-war value. By pre-war value we mean value at the 31st March, 1939."
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  There is no phrase there about prices current. It is value, and, in the Final Report, the committee stress again that:
  "We refer to a standard of value and not to prices."
  Not to prices, and they examine a number of general qualifications which must prevail when you relate value to prices. First, there is the fact that the value of money may have changed, and they point out that when the War Compensation Act was introduced it contained the provision to relate the value payment to the prices current in accordance with the changed economic conditions. They say:
  "That the matter of the change in the value of money has been the subject of legislative treatment in the War Damage Act."
  [An HON. MEMBER: "What page is that?"] Page 81. That was one of the considerations which they mentioned. Another consideration which they mention, as affecting the economic conditions, is that the acceptance of the March, 1939, standard of value in respect of the purchases made by the purchasing authority implies that the surrounding land should also be assumed to have that value. In other words, if a powerful body, like a local authority, or the State, expropriates an individual at an artificial price—admittedly an artificial price—they should give that individual power to buy land at that price, and if they do not give him that power then they must relate the value to the changed economic conditions or the modifications in the money standard. It is obviously unfair to take away the site of a man's house at a price which does not permit him to buy land compulsorily at that price. That is one of the considerations mentioned here which would be covered by my Amendment.
  They also mention that there may have been expenditure made between 1939, and the date of the notice to treat on roads or drains, or other amenities. It is true that, in a subsequent Clause, my right hon. Friend takes account of that, but only in so far as a Government Department has ordered the changes to be made for the purposes of the war. The money spent by the man of his own accord is left out of account. Another consideration is that there is a distinction between land and buildings. Obviously, when you are dealing with the site, there is no other standard but the 1939 which you can

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  take. That is generally appreciated, and I do not think contested in any quarter of the Committee, but the cost of bricks and mortar is exactly assessable, and it is hardly justifiable to say to a man when the value of bricks and mortar to-day is very much more, "We are only going to give you those bricks and mortar and the labour content of your house as represented in 1939." There is clearly a distinction to be made between such value and the cost of building. These, roughly, are the economic considerations to which I beg the Government to have regard when they expropriate the private citizen's property.
  It is a pity to confuse this issue by speaking of great landlords and laud speculators. There are Amendments on the Paper to deal with the speculator. From every part of the Committee come requests that this abuse should be penalised. That can be done. But you are not dealing with great landlords; you are dealing with hundreds of thousands, if not millions, of small people, who have houses which they either occupy or let. They are the people on whom you will rely to remedy your housing shortage. What encouragement will you give them if you say that at any moment within five years they may be expropriated, or if you say to them, this is the principle upon which the Government of Britain proceeds: "We wish you to build houses; we wish you to invest your money in house property because it is useful to the community, but at any moment you may be penalised"? My right hon. Friend said—and other hon. Members behind me have said—" Why should you give a privilege to the investor in house property?" You are not giving him a privilege. You are penalising him. You are dealing here, not with the fall in value of investments generally, or of one kind of investment as compared with another. You are not even dealing with planning. You are dealing with compulsory acquisition, and I ask the Government in which other case do they take property and fail to compensate at a fair value?
  Recently—and I would like to have the attention of my right hon. Friend the Chancellor—a firm was taken over by the Government—Short Bros.—and this was the announcement to the House." The price to be paid for the shares is to be
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  fixed as between a willing buyer and a willing seller." In other words, on market value. Here is a firm against whom it was alleged that they were not manufacturing in the best interests of the State, that they were inefficient. I do not justify it—I know nothing about it—but what I am maintaining is that you are discriminating against investment in houses, shops and factories. To these people who were alleged to be inefficient, you nevertheless gave the fair market price for those shares. When you sequestrate American holdings because it is not in British interests that private investors should have them, you pay the market value. When you take a man's lorry you pay the market value. I say that here you are discriminating against one particular kind of investment, and it is the kind of investment most useful to the State.
  There are many bulwarks of liberty in the modern State. There is equality of every one before the law. Under our Constitution there are many bulwarks of liberty, but the firmest assurance of independence is the ownership of a plot of land. It is that at which a man is entitled to aim. He has always been protected in that right. When he has acquired it, he is beholden to no man. That is the kind of ownership against which you are discriminating. I would like to say to the Government that if it be a fact, as was stated by my right hon. Friend, that the only reason why they cannot insert the market value as between a willing buyer and a willing seller in this Bill is because there is no standard, then let them adjust the value to present prices by taking account of the economic conditions.
  12.45 p.m.
  That is my request to the Government. I cannot see on what moral or logical grounds it can be resisted and I beg them to consider it. Although it would not necessarily follow that this course would commend itself to the Government, if this Amendment or some similar words were accepted and all the other Clauses on the Paper were deleted you would have a simple code of compensation, which would enunciate clearly the principle that has always formed part of our law, that when you take property you pay for it at a fair market value. That is all that we are asking. The right hon. Gentleman the Member for Wakefield (Mr. Greenwood)

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  said last week on behalf of the Labour Party that they had made enough concessions and that they did not want to accept any more. There is a clear issue. Is it, in fact, a concession to pay a man for his property? I do not think it is, but unless hon. Members behind me have the motive to injure private property in some way they ought not to seek to incorporate a provision of this kind in a Planning Bill, because it can only have the effect of making planning unpopular at a time when we wish to give it encouragement. If there is intransigeance of spirit in this matter and if it is insisted that we must not press for justice for these people because the Labour Party would leave the Government we must take that into account, but I do not believe it can be so. The purpose of the Committee stage is to argue the matter on its merits and if it can be shown, as I think it can, that property-owning is diffused and that you will be putting a selective tax on a minority of people in order to pay for your planning in any given area and that that would have very serious social effects and be an obstruction to housing they ought to agree to the acceptance of this Amendment. If they do not agree let us have the reasons why. [Interruption.] It applies to a small number of people in any given area at any given time, in other words, you are putting the cost of planning on that section of the community, which, at any given moment, is displaced.
  Lieut.-Colonel Dower: The difference between these two Amendments is very small. The first would mean that more adjustments would have to be made at more frequent intervals, whereas under the Amendment put down by my hon. Friends and myself the Treasury would make Orders from time to time. I support the right hon. Gentleman in his Amendment and in the arguments that he has brought forward. If these compensation Clauses go through unamended, they are going to create grave injustice. There is no question of that, and it is the duty of the Committee to see whether this injustice can be avoided. We cannot relieve ourselves of the responsibility and, afterwards when our constituents come to us and say "Look at what has happened in the case of my house," say, "I was a Member of Parliament and I happened to be a Member of the Com-
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  mittee but it was too complicated for me to examine and I trusted my right hon. Friend."
  There are two different types of owner—the one who lives in his house and the one who lets it. I can see no possible argument why one of those two classes should receive inadequate compensation. I do not see how we can discriminate between them. If Mr. Smith owns two houses worth £600 each before the war, and lives in one and it is acquired he will get £600 plus 30 per cent. which will mean about £800. For the other he will get only £600. Yet the houses are identical in every way. I cannot see that there is any justification for that. I admire the Chancellor of the Exchequer immensely but I do not think he can convince the Committee on that point. A house may be assessed for Estate Duties at 1944 values one day, and the next day it may be acquired by the town planning authority at 1939 prices. That is an immense difference. I have consulted one or two experts to find out how prices were likely to vary, and they told me by as much as 40 per cent. That is not fair. We should not pass Bills which bring about injustice. It is going to discourage building and it is certainly going to discourage ownership in bricks and mortar. These people will feel they have been singled out for penal taxation and for specially harsh and stringent terms and it means saying "Goodbye" to the principle of fair compensation. We have always said in the past that what the State wants it has a right to acquire. That is in the national interest. But it is not in the national interest that the public should not be paid fair compensation. This is one of the first occasions on which we are going to tell the country that we are departing from the principle of fair compensation. That is a very serious matter indeed. For that reason I shall certainly support the Amendment, and I hope the Committee will have the courage to stand up for what we believe is right and just.
  Sir Percy Harris: We have had a very passionate and eloquent appeal from the right hon. Gentleman the Member for Devonport (Mr. Hore-Belisha) for justice, and one cannot make such an appeal without being certain of a sympathetic hearing. Listening to him, one would almost believe that these Clauses amounted to

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  confiscation and that people were going to be robbed of their property by the State without paying for it. The Minister, on a previous Amendment, said that there was a case for dealing with the problem as a whole, either on the lines of the Uthwatt Report or on the basis of the White Paper, and he suggested that we ought to wait for a new Parliament and that this House of Commons had no authority to deal with the larger issue.
  Mr. W. S. Morrison: What I said was quite different. I hope that this Parliament will deal with the issue of compensation and betterment as foreshadawed in the White Paper, but I said we were not here to make permanent alterations in the law of compensation for land compusorily acquired.
  Sir P. Harris: In other words we shall have to wait for the next Parliament for a permanent change in the law of compensation. But I do not accept the argument that the 1939 price as interpreted by the Chancellor of the Exchequer is unfair. He is right. There is no real genuine market at the present time for property in the country. I should like to take my right hon. Friend the Member for Devonport to the East End of London, where whole districts have been wiped out. You cannot trace where streets were. No ordinary person in those circumstances would buy the land—no one but the speculator buying at knock-out prices in order to sell it when the local authority comes to re-plan the district. The value of the land then will have been brought about by replanning—by the action of Parliament. Without planning, the value of this property will not be 1939 prices but knockout prices. I think the Chancellor of the Exchequer has made a fair case for retaining the principle of 1939 prices.
  1.0 p.m.
  that has amazed me in all these discussions is the passionate feeling for the rights of persons who have invested their money in property. Hon. Members entirely forget the effects of the war. Owners of property are not an isolated class of people who have suffered from the war.
  There are hundreds and thousands of people who have been conscripted by the State; they have been forced into the Army, and as business men, as manufacturers and as small shopkeepers they have
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  seen their life's savings "go West." They are the real sufferers from the war. As the result of the war, there must inevitably be cases of hardship. It will be impossible to compensate those to whom I have referred. They will never have their losses made good to them. What Parliament is suggesting is that owners of property shall, at any rate, get a deal on some basis of justice. It may not be satisfactory to them and to all hon. Members, but we have found some basis, and they will get a reasonable figure for their rights.
  I would like to refer to another section of the community. In the East End of London—it may not apply to Devonport—it is customary to have, not long leases, but weekly agreements. That applies to shopkeepers as well as to householders. For many years now their occupation has been protected by the Rents Restriction Acts. Many of them are coming back to find their homes and shops wiped out, and it is almost impossible to trace where they were. Under the Town Planning Act these districts are to be replanned and the owners of the property are to get 1939 prices, but the tenants are to get nothing at all. They will get no compensation. Nobody sheds a tear for them. The owners will be compensated and will be able to rebuild elsewhere and charge whatever rent they like. I do not wish to make a pathetic case, but if we are to appeal to public sympathy and say that people ought not to suffer as a result of the war, the people who live in these houses will have an equal claim to public sympathy.
  Sir Herbert Holdsworth: Is it not a fact that if a person is turned out, the local authority—because there will be little building done by private enterprise—will provide him with a better house than he had before at no greater rent?
  Sir P. Harris: That is a delusion. The local authority will not be able to provide him with a house of the same character as he hitherto occupied. If we are going for abstract justice and say that no one is to lose a penny because of the war, the ordinary weekly tenants of houses have an equal claim with the owners of the houses. It would he impossible to devise legislation to cover them. That being so, I think that we are being reasonable in all the circumstances in giving the 1939 price as a basis of compensation to the owners. It has to be re-

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  membered that the local authority is faced with a terrific responsibility and an enormous figure for compensation even at 1939 prices. If on top of that we suggest that we should pay the market price at the time of the redevelopment, the local authority will not know what their scheme will cost. But this proposal is a compromise. If we are to save the Bill there must be a compromise on some basis, and I and my hon. Friends are prepared to support the Government.
  Viscount Hinchingbrooke: The effect of the Amendment moved by the right hon. Gentleman the Member for Devonport (Mr. Hore-Belisha) and of the other Amendments which we are considering at the same time is to remove the distinction between the owner-occupier and the owner-investor. I will confine my remarks to that question. It is a matter of great regret to me that I cannot agree with one word which fell from the lips of the right hon. Gentleman. It is a matter of even greater regret to record the fact that the right hon. Gentleman has recently rocketed out of the ranks of the Liberal Party, swept past the united front of the Tory Reform Committee without even calling there, and is now deeply embedded in the right wing of the Conservative Party. Indeed, he has even risen from that bed and is now attempting to lead the Conservative Party into the Lobbies this afternoon. My respect for my right hon. Friend is very profound, but I implore the Conservative Party to think well whether they should he so led on this occasion.
  The negotiations between the parties and the Government's search for a compromise solution on this question of compensation in a sincere attempt to forward the Bill and avoid a breakdown has resulted in a new discrimination between the owner-investor and the owner-occupier. That is causing the whole Committee and the country a lot of heart-searching. An elaborate defence of this discrimination has been put up by my right hon. Friend the Chancellor of the Exchequer on financial and other grounds, but I have not yet hitherto seen an attempt made to take hold of this discrimination and enunciate it as a new principle. When in my student days in the laboratory I used to conduct experiments in qualitative analysis, I was taught to concentrate on the sub-
  210
  stance precipitated and not to spend too much time on the chemical re-agents. That is the reason why I say what I am about to say. The Parliamentary reaction has precipitated a new political and social principle, and I think it important to look at it and see whether it is satisfactory and good. What is this new principle? It is the principle of most-favoured treatment to the owner-occupier. It is the principle of economic sanctions against the absentee landlord.
  In my speech on the Second Reading I said that one of our guide-posts during the passage of this Measure on this question of compensation should be attachment to the place on the part of the individual and his family and local patriotism, and not the character of the residence or any particular income qualification. I also said that we ought to discriminate against the speculator and the in-and-out man. I will now go further and say it is politically necessary for the purposes of this Bill and for the smooth passage of future legislation on the subject of land to seize upon this 30 per cent. discrimination and apply it to the tenure of all land and to all transactions in fixed property. One reason why hon. Gentlemen will not accept the different treatment as between owner-occupier and owner-investor is that it does not apply generally. It applies in "blitz" and "blighted" areas only. That is quite natural since this is a Town and Country Planning Bill which deals with blitz and blight. Hon. Members say that there is no justice in paying different sums to owner-investors in the same class—to Mr. Jones £1,000, whose rented six-roomed house in Plymouth has been compulsorily acquired from him by the Plymouth City Council; and to Mr. Brown £1,300, whose rented six-roomed house on the outskirts of Plymouth has been sold by him to a friend. I entirely agree with that. I think we must do justice as between owner-investor and owner-investor throughout the country. I want hon. Gentlemen to accept the principle and resolve on its general application in future legislation. The remedy clearly is that Mr. Brown should pay a tax of £300 on the sale of his house. That immediately puts him in the same position as Mr. Jones, whose property is compulsorily acquired. Justice is thereby done as between owner-investor and owner-investor.

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  I beg hon. Members on this side of the Committee to reflect on the fundamentals of the Conservative creed. In our greatest days we never sought to separate duty from enjoyment in the use of land. We never sought to withhold the one and to extract the other. In our insistence on the rights of property we did not foreswear the obligations that accompanied it.
  Mr. MacLaren: Give us the date when that happened.
  Viscount Hinchingbrooke: It is now necessary in this era of dynamic economic democracy to restate our faith in economic terms. It is necessary to use an economic lever to re-establish a Conservative principle. It is necessary to proclaim to the people that those who live and work and have their being in one place, and whose thoughts and hopes are centred there, should be favoured above their fellows who draw the means of life from multifarious interests, returning no comparable service back td the source, and whose roots in consequence strike shallow in English soil. It is said that we are not doing justice to the owner-investor. My reply is that 1939 values are his measure of justice. It is the year when this great world revolution began. Since then men have been judged on tests of ability, courage and service and not on tests of wealth and interest. These tests have discovered many humble people fighting the flames in their homes and the homes of their neighbours. They have discovered others safely ensconced in hotels and houses far from the danger. If there is any reward for behaviour in this war—if there can be any reward—we have it here in this principle of 30 per cent, differentiation—1945 terms for those who have sacrificed and suffered, 1939 terms for those who have been absent in body and spirit from the towns and cities which it is the purpose of this Bill to rehabilitate.
  1.15 p.m.
  I urge hon. Members on this side of the Committee to reject the Amendment, in the knowledge that the 30 per cent, differentiation is a spike in the coffin of absentee ownership which has, since the early days of the industrial revolution, brought untold harm on the social life of this country. I urge them to reject the
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  Amendment because, by so doing they will see the beginning of the end of that power without responsibility which financial interest has brought to bear from without on town and city, and, indeed, village life, and which has led to the destruction of so many spiritual and moral values.
  Commander Bower: I hope the Noble Lord who has just spoken will forgive me if I come down to earth, and bring the discussion back to the Amendment, although we much enjoyed hearing his history of England. Unlike the Noble Lord, I speak as a poor man, and I consider that I have a better appreciation than he of how the Bill will affect the poor. I hope I shall not weary the Committee if I use a personal illustration. I have a house. It is the only bit of property that I possess. It is in Wandsworth, a borough which has suffered very substantial damage, but my house, although damaged and temporarily uninhabitable, is still standing. I am very glad that it does not happen to be in an area likely to be replanned. I have lived in that house for 14 or 15 years and it is my only home. I cannot help thinking of what might have happened to me and to my large family if I had been dealt with under the terms of the Bill. I am speaking as a man of very limited resources, like thousands of people who will be affected by the Bill. That house took about £2,000, every penny I had in the world, to buy—and a little bit more. What would happen to me, supposing the area should be redeveloped and I were given the 1939 price? I should have to rehouse myself somewhere else, but I cannot see that I could do it in comparable fashion under about £3,500. There must be thousands of people, if not tens of thousands, in a like situation, people whose resources are far less than mine. People in my position, poor though they are, can always raise a little money in one way or another, either from the bank or by a mortgage, but there are many people who cannot do so, and whose total resources in this respect are only £100 or £200.
  The Noble Lord got up, with his highfalutin' talk and with those wonderful new principles which he has suddenly discovered, but I would remind him that this is a human problem and that the Bill is dealing with human beings, many poor human beings. As my right hon. Friend

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  the Member for Devonport (Mr. Hore-Belisha) said, the speculator can be dealt with in other Clauses, but this Clause has nothing to do with that point. The Noble Lord's distinction between the owner-occupier and the gentleman whom he so rudely referred to as an absentee, is much too narrow. Does the Noble Lord really think that every little shopkeeper who has made some money and invested it in house property because it gives him a slightly bigger return than if he put the money into Government stocks is not as deserving of the protection of the community as is the owner-occupier? Since the dawn of history it has been a laudable and commendable thing for a man to wish to own his little bit of property, and I have little patience with hon. Members on either side of the Committee who are so devoted to the great god Plan that they never seem to think of the poor blighters who are being planned.
  Mr. David Eccles: I have been listening to the Debate and, remembering what was said last week, I have been trying to recall what are the main objections to considering the owner-occupier and the investor-owner on the same footing. Apart from what was just said by the Noble Lord, I think there are three main objections. The first is that we do not want the speculator to make money out of the misfortunes of other people. We are all agreed upon that, and there are Amendments to deal with it. The second is that acts of war are bound to cause uneven losses among individuals; therefore the property owner ought to take the rough with the smooth. This argument was strongly advanced by the hon. Member for Clackmannan and Eastern Stirling (Mr. Woodburn) and, I am sorry to say, endorsed by the Chancellor of the Exchequer. Surely it confuses two quite different things. An act of war comes on us from without, we have no control over its origin, but an Act of Parliament is a deliberate intervention in our affairs, for which we in this House are responsible to those whom we represent. It is not the duty of this House to imitate the blind strokes of war, it is our duty to try to repair the damage as fairly and as evenly as we can. That is what we are not doing in the Clauses as they stand at present.
  Mr. Lipson: May I interrupt my hon. Friend to put one point
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  to him? Has not the increase in prices really been brought about as a result of the war and conditions created by war, and is it not fair to disregard it, as a war result?
  Mr. Eccles: It is true that an increase in prices has been brought about, but I am talking about the fairness of the method of compensation. I wish to concentrate my criticism of the Clauses on the point of having two scales of compensation for the same class of house. I am not so much discussing whether 30 per cent, is right or wrong. The third reason for not treating the owner-occupier and the investor on the same footing is put forward by those who believe in Spcialism. I quite understand that if hon. Members opposite want to do away with private property it is reasonable to expect that they should try to hit their man wherever and whenever they can. We had something from the hon. Member for Ebbw Vale (Mr. A. Bevan) last week to the effect that communal values were always to be preferred to individual values and that if a minority had to suffer under the Bill that could not be helped. Clearly, hon. Members who believe in tha kind of doctrine are glad to write into the Bill even a little step in the direction of expropriation. They cannot take a further step, because it has been found politically impossible to refuse something more than 1939 values to the owner-occupier. As I understand it, they consider it is politically possible to refuse more than 1939 values to the investor. We must resist that discrimination. I am surprised to find the Chancellor of the Exchequer supporting the distinction. As was pointed out by the right hon. Member for Devonport (Mr. Hore-Belisha), when the Chancellor of the Exchequer takes over securities he makes no such distinction and when he levies Death Duties it is the same duty on the house, whether it is owner-occupied or not.
  I put it to the Government that their proposals can be summed up something like this: They made a calculation of the cost in money of paying the 1939 values plus 30 per cent. to all the owners of property which has to be acquired under the Bill. They came to the conclusion that that figure was too much for the rates and taxes to hear. Therefore they said that they would limit their expenditure to a lower figure and would deliberately find the

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  difference by imposing losses upon an unknown number of investors, not selected on any standard as to their individual wealth or property, but arbitrarily picked out by Hitler's bombs and the chances of geography. I cannot understand how the Chancellor of the Exchequer and Ministers in charge of the Bill can lend their names to such an obvious act of haphazard robbery. How do they know that the taxpayers of the country would not prefer to pay the same compensation to all owners of property?
  Mr. Wilmot: I should like to interrupt the hon. Member in his very interesting statement to ask whether he is prepared to extend that principle to the owners of all property? Should everybody be compensated out of public funds, or only owners of property in land?
  Mr. Eccles: Other people's property has been compensated in that way. My main contention is that we should not apply two scales of compensation for the same kind of property. If it is found to be too expensive to pay 200 per cent., or whatever the figure may be, let us have the figures from the Chancellor of the Exchequer. Let us say what we can afford. It is not just that we should pay one scale to one owner of property and another scale to another.
  Mr. Windsor: It is priority to landlords.
  Mr. Eccles: Not at all. It is not a question of the big or the small landlords, but a question of doing the same thing to all citizens. I strongly support the Amendment on the ground that if it is not put into the Bill it will mean that a small, selected number of investors will be paying more than their fair share of the cost of the war.
  Mr. Lipson: My hon. Friend the Member for Chippenham (Mr. Eccles), who made a very reasonable speech, could not understand the difference of treatment between the owner-occupier and the owner-investor. To some of us, the Government have made their position in this matter perfectly clear. As I understand it, the argument of the Government is: "We are not really treating them differently, so far as the value of their property is concerned, but we appreciate that, if the owner-occupier loses his home,
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  he is entitled to some compensation on those grounds." That, I take it, is the reason for the different treatment. I am sure that the whole Committee were relieved to hear that the home of my hon. and gallant Friend the Member for Cleveland (Commander Bower) is not likely to be affected by the Bill. What is true of his home is probably true of a very large number of homes which have been referred to in the course of the discussion. My own feeling is that those who desire to speak on behalf of property owners are doing them a very great disservice by proposing an Amendment of this kind, and in demanding that property owners should be given their full pound of flesh by way of compensation. They are frightening small owners of property up and down the country by giving them the impression that their property will be taken away at an unfair price, as a result of the working of the Clause. In point of fact nothing like the number of small property owners that has been suggested is likely to be affected. I believe there has been a very considerable amount of exaggeration over this matter so far as the small property owner is concerned.
  1.30 p.m.
  Generally, it is true to say that, on the whole, a great many property owners have not done too badly during the war. If some of us are concerned about making further concessions it is because we have seen the way in which so many property owners have, during the war, abused the privilege of owning property, and, if a difficult situation has been created now, the Government must accept a very large measure of responsibility for it. They should have taken steps at the beginning of the war to prevent speculation in house property and land. If they had done that, if they had treated the speculator as they ought to have done—as a criminal taking advantage of the needs of the community in a time of great emergency—then this atmosphere between the two sides of the Committee would never have been created. Many of us feel that behind the small property owner who is held up for our commiseration and sympathy, skulks the speculator and those who have used the privilege of owning property to sell it at prices which have been unfair to the community, and we are very anxious that in this Bill they should not get away with it.
  My right hon. Friend the Member for Devonport (Mr. Hore-Belisha) said that

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  it was only fair that if the State took away a man's house or land at a certain price the State should see that alternative land or an alternative house should be provided for him at the same price. Are those who take that view prepared to agree, therefore, that the Government should from now on control the price of all land and all houses in the country at the 1939 value? If they are, there would perhaps be a good deal of agreement in various parts of the Committee. That is what ought to have been done at the beginning of the war. If it is suggested that this Measure is unfair to a small section because it means that their land and houses can be taken at the 1939 value, whereas other people are allowed to sell their land and houses at the current market value, that can easily be put right by fixing the price of all land and houses at the 1939 value, and making it illegal for land and properties to be sold for more. But I question very much whether those who support the Amendment are prepared to go as far as that.
  Personally, I shall oppose the Amendment and support the Government. The Government policy may be described as rough justice. It is impossible in these difficult and unsettled circumstances to get full justice, but the Government have brought forward certain proposals which seem to reasonable people to be fair and just. Therefore, I hope the Government will not make any further concessions. It is obvious that those they have already made have done nothing to satisfy their critics, and the only result has been that, like Oliver Twist, these critics have come and asked for more. If the Government gave way in this matter they will be asked to make still further concessions. I would ask my hon. Friends on this side of the Committee to reflect upon what a very wide door they are opening if they suggest that account should be taken, in fixing compensation, of the change in money values. If that is done it will have to be done for wages, pensions, old-age pensions, and in many other instances, An extremely wide door will be opened. I think that the Government have struck a proper balance between the various interests concerned in this matter, and I hope the Committee will support them.
  Mr. Mander: I could not help thinking, as this Debate went along, what a pity it is that
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  Henry VIII was so hard up that he was obliged to finance his wars by distributing the great estates that had come to him through the dissolution of the monasteries to people who became individual land owners. But for that the State would have owned, through the Crown, one-third to one-half of the land of England at the present time. What a difference that would have made. Unfortunately, things have not worked out that way, and we have to deal with the situation as it is. I think this state of affairs, as it has been developing on this Bill during the last few weeks, is rather remarkable. First of all we have had a National Government directing their minds to this problem and coming forward with what they thought was a fair solution. Then tremendous pressure was brought to bear upon them from certain quarters, and in association with Members of this Committee they agreed on concessions and came to the Committee again. They have brought proposals agreed upon by members of all parties, and I should have thought that would have been sufficient to justify this Committee in giving support to those proposals. But that does not seem to be the case. It appears there are certain interests, I suppose in a broad sense the landed interests, which will not be satisfied with anything else than their full pound of flesh.
  How can there be any sort of justice in connection with war? Nobody ought to expect to make any profit out of it or to be other than extremely fortunate if they do not make a serious loss. We ought to keep some sense of proportion. When one thinks of a soldier who treads on a mine in France and loses both feet, or an airman who is shot down in flames and loses his sight, how are they to be compensated? I say that the people of this country, whether owners of property or not, are fortunate indeed to be alive and to have been defended in years of peril by people like those on service, and to come forward and say, "Whatever happens to those who have really borne the heat and burden of the day we must have 100 per cent. of our claims," is something which I believe is contrary to the wishes of the Committee and the country. I support the Government and I hope they will make no further concession.
  Vice-Admiral Taylor: The compensation of property

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  compulsorily acquired by the State has always been based on its current market value. In this case the Chancellor of the Exchequer has said there is no current market value for house property, and in view of that fact he has decided to bring in an artificial value—that at March, 1939. It may or may not be that that is a fair value to decide on, but if it is I maintain that that value should be given to all owners of house property and there should not be the differentiation which is being made between the owner-occupier and the owner-investor. My right hon. Friend the Chancellor of the Exchequer has put forward the argument for preferential treatment of the owner-occupier that when he is compulsorily displaced he loses his livelihood, that in many cases he may have a small business. The owner-investor, on the other hand, apparently does not. There are very large numbers of owner-investors in this country, people of very small means who by their thrift and enterprise have invested in house property, which is always looked upon as a very sound capital investment, and they have been encouraged to invest in house property. They have carried out a great social service in building these houses for people to let. Private industry has built an immensely greater number of houses to let than have local authorities, and people have invested their savings in this house property. Therefore, if their houses are compulsorily taken over they are also losing their livelihood, which is the rent they obtain for them. I cannot see the difference between the owner-occupier losing his livelihood and the owner-investor who has put his investment into his houses losing his livelihood also. Therefore, as a matter of justice and equity the owner-investor should have the same treatment, whatever that treatment may be, as the owner-occupier.
  My right hon. Friend the Chancellor of the Exchequer gave another reason. He said that the chance of a house being taken over compulsorily by the State was an ordinary risk which the owner of property had to face. I do not accept that statement. It is not an ordinary risk; it is quite an extraordinary risk to have one's house compulsorily acquired by the State or by some local authority. I think it is a very bad argument to suggest that the owner-investor must accept
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  this risk of being treated differently from the owner-occupier because the Chancellor of the Exchequer suggests it is an ordinary risk. I know quite well that hon. Members of the Socialist Party consider that all landlords are first-class rascals—[An HON. MEMBER: "Second class"]—who always exploit the public, that they are profiteers, that they do not look after their property. That is very far from being the case. No hon. Member of this Committee upholds the man who buys a property at a cheap price due to circumstances of the war, or any other circumstances, purely as a speculation, with the idea of holding it until there is a big rise in price and he can get out at a good profit. No one has any sympathy with such a man. But because we want to stop that kind of thing happening is no reason why this monstrous injustice should be done to the perfectly bona fide straightforward owners of house property. It is regrettable that legislation to deal with the speculator has not been brought in. I hope that it can be and will be done, but do not bring forward the argument that as there are speculators it is necessary to deal unjustly with the owners of house property in general.
  1.45 p.m.
  The damage that has been caused during the war by enemy action has given this country a unique, opportunity to replan our badly damaged cities and towns, and, of course, it would be criminal not to do so. In doing so, the State have got to acquire a considerable amount of house property. In many cases the acquisition of that property would not have come about but for the war. In any case, it is no argument to say that, because the war has done this immense amount of damage to house property therefore the householder should not receive fair compensation for the compulsory acquisition of his property. I support the Amendment.
  Captain Cobb: I do not suppose any Member of the Committee pretends that this matter of compensation is a simple one: it is extremely difficult and complicated. The difference between us who are supporting the Amendment, and the Government and those who adopt their point of view, is that we are firmly convinced that the proposals in the Government's Clause will do a great deal of hardship and injustice which could have been avoided if better provision had

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  been made by the Government. That is the fundamental difference that divides us. It is evident that there is injustice in this Clause, since differing payments arc to be made for the same kind of house, according to whether it is lived in or lived on. If one assumes that a house which is an investment is being adequately compensated, the 30 per cent. extra which the owner-occupier will get will be grave injustice to the taxpayer, who will be finding the money; but if, as is more likely, the payment on the investment house will be inadequate, that will constitute a gross injustice to the owner. This 30 per cent. is completely meaningless. It is just a guess as to what will happen in the future. It may prove a good guess, in which case there will be no complaints. On the other hand, it may prove a very bad guess indeed. I cannot see why the Government are unable to accept the principle that compensation should be based on current market price.
  It seems to me an extraordinary thing, in view of the great public service which investors in house property have conferred upon the community in the past, that the Government should penalise them in this way. I am not suggesting for a moment that they made the investment in order to benefit the public: they did it because house property was a good investment. But, by doing so, they conferred a very great benefit upon the community in the years between the wars, because it resulted in more houses being built. I am alarmed at the thought that the Government are going to take this punitive action against investors in house property, because of what will be the effect after the war. The effect will be that all the building of houses for the working-classes will be done by the local authorities. We all know the part that private enterprise in house building played in the years before the war, and it would be a lamentable thing to discourage that kind of enterprise. Surely there is only one kind of compensation which would commend itself to fair-minded people. That is compensation which is in fact restitution. The owner-occupier should be provided with the means of building himself an equivalent house elsewhere, and should not be out of pocket by so doing; while the owner of house property who uses it as an investment should be given a sum
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  of money which brings him an income equivalent to that which he was receiving from those houses, making a deduction, of course, according to the age and condition of those houses and taking into account the fact that houses are a wasting asset. Anything which falls short of that must do very grave injustice. My hon. and gallant Friend the Member for Stafford (Major Thorneycroft) used the argument, not to-day but on another occasion, that if one has an unlimited escalator it will have the most disastrous effect on building costs. I believe that to be an unsound argument. After all, 80 per cent. of building costs are due to direct and indirect wages.
  Mr. A. Bevan: Will the hon. and gallant Member sustain the argument that 80 per cent. of the cost of housing is wages? On innumerable occasions it has been shown that the heaviest part of the cost is the servicing of borrowed money.
  Captain Cobb: I was told that by an official of a public authority. His estimate of wages was based on the wages paid to men producing the building material as well as to the men actually building the houses. I am not quoting that as though it were the word of the Almighty, but as a statement made to me by a local authority official, who had had great experience of house building. He gave it to me as his considered opinion that about 80 per cent. of the cost represented wages.
  Sir Robert Tasker: It is an under-estimate.
  Captain Cobb: I believe that this inadequate compensation which the Government are providing in this Clause is due to the very healthy desire of the Government and of every Member of this Committee to make sure that unfair profits are not earned by the land speculator. Nobody wishes that that fellow should escape; but, in their desire to penalise this undesirable specimen of the community—I do not believe he exists in very large numbers—the Government are penalising quite large numbers of ordinary decent people, who have committed no crime against the community, except for their natural desire to be independent. The argument was used to-day by the hon. Member for Cheltenham (Mr. Lipson) that it is wrong to worry overmuch about these people who are going

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  to be dispossessed, because there are comparatively few of them. That is one of the most immoral arguments to which I have ever listened. It does not seem to me that a man who picks one's pocket is any less dishonest than a man who floats a bogus company. The only thing which ought to affect us at all is whether these compensation Clauses will give a fair deal to those men and women who are affected by them. I am convinced that if this Clause is passed a great deal of injustice will be done and a great deal of avoidable hardship caused. That is why I support the Amendment. I hope that, at a later stage, there will be ample evidence that the Amendment has a great deal of support among Members of the Committee.
  Rear-Admiral Beamish: I rise to support the Amendment. I can judge of these extremely complicated questions of compensation only from my post-bag and my personal experience. The Government's intentions, as at present expressed, are neither fair nor equitable nor just. There is really only one test, as I see it, and that is, whether the thing is equitable and just. I have never been able to understand why it has been considered by some a sinister thing if a citizen seeks fair compensation from the State, and a dexterous thing if the State drives rather a hard bargain, and an unfair bargain, with the citizen and the owner of property. I certainly acquit both the Ministers who are here to-day of any such intention, and of any calculated dexterity, but I feel that they and the country are the victims of the catastrophic disturbances that we are going through at present, and that if we pass the Bill without some adjustment of the compensation Clauses, we shall be laying the foundation for further avalanches of disaster to fall upon law-abiding, decent citizens. I am perfectly confident that if it had not been war-time, no such Bill as this, containing these compensation Clauses, would pass.
  I speak rather plainly. I have no doubt that there is a certain amount of joy in some quarters about the sorrows and injuries of the nation, and that the crushed and blasted cities and their homeless and impoverished people are being used now as the raw material of political aspirations. I have had a hint given to me—and I
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  have certainly read it—that if the war damage had been greater, the possibility of expropriation would have been increased. I cannot believe that expropriation, without proper compensation, is the right way to deal with this matter. It looks to me very much like political looting. For some Members of this Committee and some local authorities to look upon the spectacle of the seven battered and shattered cities and to wonder, as some of them are doing, what political capital they can make of them, is, I think, political looting.
  2.0 p.m.
  Viscountess Astor: Has the hon. and gallant Member seen a completely devastated area, like Plymouth, for instance? Has he been there?
  Rear-Admiral Beamish: Yes, I have seen the Noble Lady's blasted city. I have seen it and I know it quite well. I have also been to Bristol, and I know exactly what is going on. I am just astonished that it is possible for anybody to endeavour to make political capital out of the sorrows and sufferings of people, but such is the situation. I am quite sure that this sort of feeling is not shared by the bulk of the people, nor by the bulk of the Labour Party, nor by the bulk of the party to which I belong.
  I would remind the Committee that the position which we see to-day could never have been brought about by the normal procedure of votes in this House or of the electorate of the country. No one likes the exploiter. I think, perhaps, I hate him more than does any hon. Member here. I can imagine nothing more wicked or cruel than to exploit the citizens of this country—I mean the land rogues and property rogues and so forth. But, surely, their opportunities for exploitation are easily controlled by taxation and by law?
  Mr. Silkin: Is my hon. and gallant Friend aware that any profits made out of speculation in property are not subject to tax?
  Admiral Beamish: I can only reply to that by saying that I would deprive the exploiter of land, such as those of whom we are all aware, of practically everything, by law, rather than allow him to exploit the ordinary citizens of this country. What I feel is so unfair is this.

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  None of the people whose property has been destroyed or razed to the ground, either in the Noble Lady's city, or anywhere else, are law-breakers, but, frankly, I feel that they are in grave danger of being broken by the law, and we have no right to put them into such a position.
  One further general consideration is this. I have yet to learn that the State or the local authority are anything but rather harsh owners of property. In fact, whenever I come in contact with people who are tenants of the Crown or of a local authority, I find that they are in the greatest difficulty, because the local authority or the Crown cannot be proceeded against in law, or, at any rate, not with any prospect of success. I think I have said enough to enable the Committee to realise that I feel very strongly that this compensation ought to take the line of the Amendment, and I am perfectly sure that the Government will have no cause to regret coming into line with the proposals of the right hon. Gentleman opposite in the interests of justice and equity.
  Mr. Naylor: I approach this question from a point of view which is somewhat different from that of hon. Members on the other side. It has always seemed to me that no one has a right to complain if, by the incidence of war, he suffers personal loss. We all expect to lose something as a result of war conditions. Many instances might be quoted of various classes of people who, indeed, have no hope of compensation, simply because what they have lost, although valuable to them, has no market value.
  I represent a constituency where there are probably very few owner-occupiers in the sense in which the word is used by some hon. Members opposite. The local authority will be obliged to requisition a great deal of property in my division, which is somewhat similar to many other divisions in London and throughout the country. That means that they will be compensating land-owners and house owners who have hitherto paid no regard whatever to the comfort or health of those who rent their houses, and I am asked by those in favour of the Amendment now before the Committee, to go to my constituents and tell them that the owners of the damaged houses in which they for-
  226
  merly lived, or in which, even now, they may be living, are expecting to get, not merely the value of the property as it stood in 1939, but also a progressive increase, if circumstances seem to demand it, right up to 30 per cent, as laid down in this Clause. An hon. Member opposite said it was a pure guess. I think I am justified in saying that those who drafted the Bill, and the Minister himself, agree, that the 30 per cent. is the result of a calculation.
  Captain Cobb: What is the difference between a calculation and a guess.
  Mr. Naylor: A great deal. Two and two make four; that is a calculation, not a guess—
  Captain Cobb: What is the formula which arrived at the 30 per cent.?
  Mr. Naylor: If the hon. and gallant Member makes it five, he is guessing and guessing wrong. My feeling is that, in this particular instance, he is dealing with the case of another estimate of 80 per cent. Was that a calculation or a guess?
  Captain Cobb: I informed the Committee that that was a calculation that was made by a very experienced officer in the housing department of a local authority. I did not give it as my opinion, nor as my guess, nor as my calculation.
  Mr. Naylor: My reply is that the 30 per cent. is not the calculation of one experienced man, but that of a large number of men, who have come to the conclusion that, so far as the future could be pierced, 30 per cent. represents, roughly, an average of the difference between the 1939 value and the value under reconstruction.
  I am glad the right hon. Member for Devonport (Mr. Hore-Belisha) has come in. I listened very carefully to the speech he made. I cast my mind back 20 years ago to the time when the right hon. Gentleman was returned triumphantly for Devonport, was carried on the shoulders of his constituents, and was recognised all over his constituency as one of the new Tory democrats. Where was his democracy this morning in moving this Amendment?
  Viscountess Astor: He was never a Tory democrat.
  Mr. Naylor: He was a Tory champion.
  Viscountess Astor: He ran away. He never was a Tory; he was returned as a Liberal, and is entirely out of touch with his constituency, which he has hardly seen for five years, while I have never left it.
  Mr. Hore-Belisha: I know one has no right in these matters to expect courtesy or even reasonableness, but I would invite the Noble Lady to withdraw. She seems to forget that she had her name to this Amendment.
  Viscountess Astor: Not this Amendment.
  Mr. Hore-Belisha: Yes, on the Order Paper, as it was before. What the Noble Lady has said is entirely without foundation, and I would invite her to withdraw it.
  Viscountess Astor: I am very sorry, but I could not think of withdrawing it. The right hon. Member knows perfectly well that he is not really in touch with his constituency.
  The Deputy-Chairman (Mr. Charles Williams): I think we had better go back to the speech.
  Viscountess Astor: We had better go back.
  The Deputy-Chairman: Really, the Noble Lady has no business to address the Chair in that manner.
  Mr. Naylor: After that neighbourly exchange of views between the hon. Members, perhaps I may be allowed to proceed. I rather misrepresented the right hon. Gentleman when I said he was a Tory democrat, because he was a Liberal. But that makes it worse. To have been a National Liberal, and now to have become the champion of the Tory landowners is a metamorphosis which will want a lot of explanation when the General Election comes. I invite the right hon. Gentleman to consider that he will have to do one of two things—go back to his constituents at the General Election and tell them that his views are just the same to-day as they were years ago, or to stand under the auspices of the party of which the Noble Lady is a Member.
  Viscountess Astor: Certainly not.
  Mr. Naylor: I ask hon. Members opposite, who are pleading for this Amendment, to remind themselves of the losses
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  that have been incurred, for which there is no compensation whatever—losses of home and comfort, the disability of being transferred from one's own city and being billeted upon strangers. All these are losses just as important as the losses in finance, which have been explained in justification of this Amendment. I appeal to the better feelings of hon. Members opposite. Surely, the case of the wealthy landowner, or even the case of the owner-occupier of a house is not comparable with other losses incurred as a result of the war itself? When a man loses a limb in the war, or suffers any other disability, he is pensioned. But has anyone ever proposed an Amendment that the pension should be a sufficient recompense or compensation for his loss? Not at all. It is merely a grant made to him to enable him to live, and he loses the health which he previously enjoyed and he makes no complaint. Here we have the landowners rising in their might, actually before they are hit, and saying that they are not prepared to suffer any diminution of their compensation as a result of the war.
  The Minister has an easy task in refusing this Amendment. May I take him back to a certain play which we all know—"The Merchant of Venice"? The Minister will have it within his recollection, I am quite sure, because I have heard him quote Shakespeare before. He will remember how, in the trial scene in that remarkable play, Shylock was offered three times the value of his bond. He refused, just as hon. Members opposite are refusing to accept the 30 per cent.
  2.15 p.m.
  Mr. Erskine-Hill: Hon. Members on this side want to get one thing and one thing only, and that is, the true value. If that figure is 30 per cent. and can be shown to be so, we shall be content.
  Mr. Naylor: I wish I were Portia. The answer to that is that the offer has been made, just as Bassanio made the offer to Shylock of three times the value—the offer has been on the 1939 value, up to 30 per cent. above according to circumstances and the hon. and learned Member opposite refuses. Portia said:
  "The Jew shall have all justice."
  If we give justice to hon. Members opposite, all we need give is 30 per cent. over the 1939 value—[HON. MEMBERS:

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  "Price"]—if the circumstances justify it. I would remind Members opposite of Shylock's fate at the end of the trial.
  Captain Cobb: On a point of Order. Are we to introduce anti-Semitism into this Debate?
  Mr. Naylor: I am surprised that the hon. and gallant Member should try to introduce a question of that kind merely because I quoted Shakespeare. I am not making any other allusions except to a character, more or less fictional, produced by the greatest dramatist of any age. Portia said:
  "The Jew shall have all justice."
  And Shylock said:
  "Most rightful judge."
  Then Portia said:
  "If thou dost shed
  One drop of Christian blood, thy lands and goods
  Aro . … confiscate."
  And as a result Shylock was reduced to the plea—and this is a warning to Members opposite—
  "Give me my principal and let me go."
  If Members opposite are not careful in pressing this Amendment, in all probability they will be left with their principal and allowed to go. I apologise to the Committee for quoting Shakespeare in Committee. It is a most improper thing to do, I know, but may I conclude with an appeal to the Minister. It is the appeal made by Bassanio to Portia. That appeal—assuming that there is logic in the demand of hon. Members opposite, and that every owner will not get full market value when his property is requisitioned—which I make to the Minister, in the words of Bassanio is:
  "To do a great right do a little wrong;
  And curb this cruel devil of his will."
  Sir G. Schuster: I am not sure that I have been drawn to my feet by the hon. Gentleman's appeal to my better feelings, or by the partial warning given to us, but I hope perhaps, when he has heard me speak, he will see that there are some elements of better feelings in what I have to say. I have twice already expressed a view that this looks like a very bad Bill, or at any rate a very bad part of the Bill. The more I look at it, the more I feel convinced that that judgment is right. And my anxiety has not been allayed, in
  230
  fact it has been rather increased, by some of the arguments which the two Ministers have made in speaking of it.
  The question we have to ask ourselves now is, Is this Amendment which is before the Committee likely to remedy the defects which we feel are in the Bill? Therefore, if one takes the view that I do, it is necessary to run briefly over the points which appear to be defective and open to criticism. I regard it as a bad Measure because it is a piecemeal attempt to tackle part of a job, which ought to have been tackled comprehensively. I regard it as a bad Measure because it attempts to give compensation over a vast range of differing types of property and differing interests. That cannot be done and we ought to have a separate compensation Measure dealing with the different interests. I see no way of getting out of the trouble that we have got into by attempting to deal with compensation in the way with which it is dealt in the Bill. As an elaboration of that second point, I regard it as a bad Bill—
  The Deputy-Chairman: I ought to point out to all hon. Members in the Committee, that we are not dealing with the fact of whether this is a good or a bad Bill. We are dealing with the point of whether it is a good or a bad Amendment.
  Sir G. Schuster: I fully appreciate that fact, but I find it very difficult to explain the points which I want to put to the Committee unless I run very briefly over what I consider to be the defects in the Bill.
  The Deputy-Chairman: That is not the point. It is not what the hon. Member finds convenient. In this Amendment we are dealing with a particular point. If every hon. Member throughout the Committee stage advanced that same reason for giving a rough sketch of the Bill on every Amendment, Committee work would be impossible. Therefore, we must keep to the definite point of the Amendment.
  Sir H. Holdsworth: Did not the mover of the Amendment illustrate in his speech what the suggestions of the Government were and give his reason for moving the Amendment, and cannot the hon. Member for Walsall (Sir G. Schuster) do the same?
  The Deputy-Chairman: I am not objecting to any illustration. I am objecting to hon. Members saying that it is a bad Bill not once in a speech, but at least twice. We must stick to the point.
  Sir G. Schuster: I fully appreciate the point and I will try to keep within your Ruling, Mr. Williams. I certainly was addressing myself to the compensation part of the Bill and I hope that it is in Order to say—and that is the third point that I was going to make—that, from the arguments we have heard from the Treasury on this matter, one of the things that they have to take into account in settling compensation, is not merely the acquisition of property which will be required for carrying out town-planning schemes, but the settling of compensation for property taken over by the Government at various stages during the war.
  The fact that we are dealing with two people has led to some of the trouble over this Measure. The arguments that were used were based on the fact that this is really fundamental to the question of compensation; that there is no real standard of values, and in support of that we were given an illustration of how values had slumped in towns like Ramsgate, or places on the East Coast, and how they fluctuated during the years 1941–42–43. I want to put it to the Committee that we are not considering those conditions now. Most of us are looking at it as a Town Planning Bill and to conditions as they will be in 1945, 1950 and so on. I suggest that those arguments really are not relevant.
  Another point I want to make—perhaps I shall have a little more sympathy from the Benches opposite when I make it—is that the provision as it stands at present provides, quite apart from the 30 per cent., a fixed standard, which, I fear, is going to be a wrong standard in many cases. I think it is going to be a much too high standard. We all know cases of houses which, owing to changed conditions, have become unoccupied and are described as white elephant houses, such as houses in Belgrave Square, large basement houses, and so forth. I do not want to see the Government or public authorities committed to the taking over of houses of that kind on the basis of 1939 value. One can take that illustration, and show that the provisions of compensation are badly
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  framed. We had the argument from the Treasury Bench, which is admitted, that a great many people will, under this provision, get more money than would be the case if current values were taken and we are asked to balance that against the cases of those who will get too little. That is the well-known swings and roundabouts argument, but it has been well said that the swings and roundabouts argument is all very well when the swings and roundabouts are in the ownership of the same individual, but when one owns the swings and another the roundabouts, the gains on the swings are going to be very little consolation to those who lose on the roundabouts. I put it to the Government that the argument which has been used, that some people will get too much and that that will balance those who get too little, is very unconvincing.
  I object to the compensation Clauses on the ground, mentioned by so many speakers to-day, of the discrimination between the different types of ownership. I want to put a question to the right hon. and learned Gentleman on the matter. As far as I have been able to follow the argument the position as it exists has not been clearly stated. We talk as if it were quite simple to distinguish between owner and owner-occupier, and it has been said, when discussing this matter with certain ownership interests, that the landlord who owns a ground-rent on a 99 years lease, owns a money claim which could be bought and sold in the market like ordinary land. That is admitted, but do all hon. Members realise the position where you have a ground landlord whose property is let on a 99 years lease, where the tenant could claim as the owner-occupier, and would be entitled to the 30 per cent. compensation based on the value of his tenancy interest. In the case of a new building on a 99 years lease that would be practically 100 per cent. interest on the property.
  2.30 p.m.
  I would point out that one can qualify as an owner-occupier if one is holding a tenancy that has more than three years to run, so that the owner-occupier, is brought down to a very short term of tenancy. Supposing one has a tenancy of a fairly new building with five years to run, so that the reversion is of considerable value, in that case the 30 per cent. would be payable on that reduced interest

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  of only five years, and all the rest would be blank and there would be a gap. There must be something wrong there. Last week, when the right hon. Gentleman was distinguishing between the position of a man who has lost a home and the man who has lost an investment, he was interrupted by the hon. Member for South Croydon (Sir H. Williams) who said, "In both cases, a home is destroyed." My right hon. Friend then said—
  The Deputy-Chairman: I am sorry to interrupt my hon. Friend, but really the question of ownership by an owner-occupier comes in the next Clause, not in this. This is merely a matter of compensation. If we are to discuss the whole question of the owner-occupier here, it will create difficulties.
  Sir G. Schuster: I am very sorry, Mr. Williams, but I thought we were discussing the compensation Clauses in regard to every kind of interest. That is one of the troubles of these Clauses: they are omnibus Clauses which cover everything, and practically every speech to which I have listened, since twenty minutes past one, has concerned itself with this distinction between the owner and the owner-occupier. In fact, it has been the main point on which the arguments have been based. However, I do not wish to elaborate the point too much. I would have liked to put this point to my right hon. Friend, quoting from what he said last week, when he was interrupted by the hon. Member for South Croydon. He said:
  "If a man has security of tenure, you can compensate him for it if he loses it. We can deal with that when it arises."—[OFFICIAL REPORT, 19th October, 1944; Vol. 403, C. 2666.]
  I want to ask my right hon. Friend what he meant by those words, "We can deal with that when it arises"? It seems to me that it is dealt with in the Bill, but if he has something else in his mind, I hope he will make that clear.
  This really touches a very important point in connection with compensation matters. As I understand it, one of the great difficulties is that it is nut merely a question of settling the value of a particular type of property, but of settling compensation for differing interests in the property. We have introduced in this Bill a principle which is completely new, because the right to get extra payment, as the Clauses on the Paper stand at
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  present, is to depend not so much on the value of the property as on the personal circumstances of the individual concerned. That seems to me to be a perfectly valid basis of compensation—it is, indeed, a great enlargement of the basis of compensation for disturbance—but if we are introducing that new principle we should know something of the grounds on which judgment is to be given. As far as I can make out, on the Clauses as they are drafted, the Appeal Tribunal is given no guidance at all, and practically a blank cheque is given to the Appeal Tribunal.
  The Deputy-Chairman: The hon. Gentleman has just mentioned "the Clauses." I must point out to him again that we are not dealing with a Clause, much less with Clauses; we are dealing with an Amendment to a Clause and that is all.
  Sir H. Holdsworth: On that point, Mr. Williams, it was agreed by your predecessor in the Chair that we should discuss the other Amendment on the Paper relating to this matter. One is bound to use an argument to show how the interests of a particular person are affected, and I do not think we can discuss this Amendment if such references cannot be made.
  The Deputy-Chairman: But the hon. Gentleman was going on to appeal tribunals and other things entirely outside this Amendment.
  Sir G. Schuster: I must apologise to you, Mr. Williams. I can assure you that I am not trying to be troublesome but I am worried about these points. I am trying to understand them, and, at some stage or other, I feel they ought to be elucidated in Committee. I certainly do not want to incur your rebuke any further and I will try to keep within your ruling.
  I will go on to another rather fundamental point of objection, that as the matter stands at present I do not feel that owners are being given adequate opportunity for re-instatement. That is really the point on which I stand and where I feel in difficulty about supporting my right hon. Friend's Amendment. I have been reflecting a great deal on this matter since the Debate last week, and I was much impressed by many of the arguments used from the benches opposite. I certainly do not want to support any Measure which would enable any owner of property to get in his pocket a sum of

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  money, which represented a large cash profit to him. I want to ensure that every person interested in property, entitled to compensation under this Measure, should have a chance of re-instating his property which is taken. As I put it last week, the people we are concerned about are those who say, "We had a house; we did not want to sell the house, we wanted to continue having a house; we do not want a profit." I have an Amendment on the Paper—I understand it is doubtful whether it will be called—but perhaps as it illustrates my point in relation—
  The Deputy-Chairman: No, the hon. Gentleman cannot use the occasion of this Amendment, to address the Committee on some other Amendment.
  Sir G. Schuster: I was hoping that I could pick up one of your own phrases, Mr. Williams, and use it by way of illustration. I was going to illustrate my doubts as to whether I should support the right hon. Gentleman's Amendment by showing what I want to achieve, because I feel that his Amendment does not achieve that and, indeed, may result in what I want to avoid, a large number of people getting extra money into their pockets, and I think, starting on a basis which is too high. I want to ensure a Measure which will mean that you only get extra money if you rebuild your home. I was basing my views on what I believe to be a very sensible scheme which has been adopted in the case of requisitioned ships—the tonnage replacement scheme. There, an owner of a ship which is lost is entitled to two payments—to the basic payment which represents the pre-war insurance value, and he is also entitled and gets credited with an additional payment representing—
  The Deputy-Chairman: I think I should warn the hon. Gentleman, as I have tried to warn him before, that he has an Amendment on the Paper and, if he discusses that now, there will be no hope of its being called, even if he now uses it merely as an illustration.
  Sir G. Schuster: It is a question of how many birds in the bush are equal to one bird in the hand.
  The Deputy-Chairman: No, we really cannot have this effort to get birds in
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  the hand on one Amendment which refers to another Amendment. I must ask the hon. Gentleman to keep strictly to the Amendment.
  Sir G. Schuster: I do find this very difficult, Mr. Williams. I have been trying to put a point to the Committee which seemed to me one I could illustrate by referring to what I myself was proposing. If I am not allowed to do it, I must stop, and I will bring my remarks to a close.
  The Deputy-Chairman: So far as I know, I think that Amendment will be called, and what I say quite frankly is that if it is discussed now, it cannot be called and discussed again. I thought it only right to warn the hon. Gentleman that he should not give his illustration so fully on an Amendment which is likely to be called.
  Sir G. Schuster: I am extremely grateful to you, Mr. Williams. I understood it was doubtful whether it would be called. I thank you for your warning and I will say no more about it. I feel there is a way of dealing with this matter and I want to reserve my opportunity for offering it to the Committee. I still feel, on the grounds that I explained very fully last week, and have referred to again to some extent to-day, that this is a bad Measure, that it is very unfortunate, and I hope there will be some chance of amending it. I hope I shall have an opportunity of doing so in one way at least.
  Sir Oliver Simmonds: I have listened to hon. Members who find objection to this Amendment, and it seems to me that the Committee is being confused on account of the fact that certain houses or properties have been damaged by enemy action, while others, it is proposed, as an act of convenience to the community, shall be taken at some future time. I fail to see how it is possible to apply the standards of the one case, to the circumstances in the other. We have the War Damage Act under which we have paid our contributions—and, let it be understood, contributions drawn from capital, not from income—and we have enjoyed a measure of protection through that Act. I cannot believe that hon. Members would oppose this Amendment if they had not, at the back

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  of their minds, the thought that there was a certain scale of payment under the War Damage Act. Why should an owner, whether he be an occupier or non-occupier, who is left by the enemy in possession of his house or factory, have that taken away from him by the community at some price less than its value? I can well understand that we must say to the owner of a property that has been damaged by the enemy, "You cannot have its present true price because, in fact, it is not inherently there; it has been removed by the enemy, and we have agreed, in relation to the contribution of premiums you have made, to compensate you on a certain scale." But I fail, in justice, to understand why, some time in the future, a local authority should say to any citizen whose property is undamaged by the enemy, that they propose to take it from him at less than its true price then. I do not see how that can find justification in the eyes of many Members of the Committee who appear to oppose this Amendment.
  2.45 P.m.
  We have, possibly, become a little tired in this place on this particular issue, and I have just been wondering how it appeals to those outside. I was very struck by my reading of a weekly which I would normally regard as rather pink, sometimes distinctly red, and certainly never true blue: I refer to "The Economist," and I would like to quote what it says on this point:
  "This whole episode is an example of the growing tendency to argue that robbery is not robbery if the victim is rich. Indeed, it is a particularly bad example, since it is not the whole, class of property owners who are to he expropriated but only those members of the class who are unfortunate enough to own property in blitzed areas."
  By this morning's post I received a letter, not from one of the great rich property-speculators, but from a woman industrialist in my constituency, in Birmingham. The writer, who has already been turned out of her factory premises in order to assist an improvement scheme of the local authority, and who, by the way, insists that on that occasion she was fairly treated, says:
  "If I am forced to sell to the Birmingham Corporation at 1939 values then … it will hit me hard financially. There is certainly an advance of 30 per cent. for owner-occupiers, but I live away from the factory and, therefore, that Clause could not benefit me."
  Hon. Members: Why?
  Sir O. Simmonds: It may be that she makes a faux pas there, but that does not affect the issue as to whether she will get a fair price for her property.
  Mr. Wilmot: Is not the hon. Gentleman's constituent the occupier of business premises; and will she not, therefore, qualify as an owner-occupier?
  Sir O. Simmonds: It may be as I have said that she has, in her particular case, made a faux pas, but it does not affect the fact that she will not get a true price for replacing her present property. That is the issue. This woman goes on to say:
  "Sizing up the whole issue, I am very puzzled, because the present basis does not seem to me an honest transaction."
  She appreciates very well that there is no intention, at present proposed by His Majesty's Government, that she should get a price for her factory which will enable her to move to a new site, without having a capital loss to meet herself.
  Mr. James Griffith: She will get it.
  Sir O. Simmonds: No, she will not. I feel that the Committee ought to bear in mind that here we are touching very basic moral issues. It has been our pride in this country to speak of sterling. What did sterling mean? It meant confidence in the values that this House placed upon the property of the citizen. That, in the last analysis, is the basis of the sterling reputation. Can anybody say that if, at this stage, we deal lightly with this issue of private ownership, we are not treading on very dangerous ground? I think it is true to say that hon. Members opposite have never taken this question of the private ownership of property very seriously. [HON. MEMBERS: "Oh"]. No, I think all the utterances of hon. Members opposite have tended to gloss over this issue. On the contrary, the Conservative Party have consistently maintained that if a citizen's property is taken by the State, he should he paid fair value at the time of purchase. That is what some of us who are supporting this Amendment stand for to-day.
  I sincerely hope that we shall not be rushed off our feet by suggestions that this is a dangerous time to stand firm if the Government think in other ways. I think we have been, if anything, too considerate to some of the views of hon.

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  Members opposite and that this is an issue on which the Conservative Party ought to stand firm. I feel that very definitely, and I say it for no political reasons at all, but for the basic reason that there is an essential moral principle underlying this Amendment. I sincerely trust that all, or if not all, nearly all, my hon. friends on this side of the Committee will support the right hon. Gentleman the Member for Devonport (Mr. Hore-Belisha) in his proposal.
  Mr. Mack: I think the Committee will have listened with mixed feelings to the speech of the hon. Member for Duddeston (Sir O. Simmonds). The funniest part of it was that in which he talked about morality and the rights of small people. The Uthwatt Report laid down two principles which Members of the Committee could well take to heart. One was that compensation for public acquisition or control of land should not exceed the standard values at 31st March, 1939. It went further and, referring to the efficiency of the community and the wellbeing of the individual, stated that this involved the subordination to the public good of the personal interests of landowners.
  A peculiar thing happened just before this Debate. I received a peremptory telegram from a group of property-owners in Newcastle-under-Lyme telling me to support the Amendment in the name of the right hon. Gentleman the Member for Devonport (Mr. Hore-Belisha). Well, the right hon. Gentleman has a rather different political mind now from that of a few months ago, or so it would appear from his latest speeches. When I look at the Members who are supporting him I am certain that they have not—however well-intentioned they may be—the interests of the general community in this country at heart, and, more particularly, the interests of people who will benefit by reconstruction of our blitzed areas. In the "Daily Express" to-day there is an editorial which tells the story of a small investor who went to see the editor this week. This man had two houses. One he lived in and the other he let at a comparatively reasonable rent for the purpose of getting a fair return for his money. After contrasting this case with the case of the speculator in property the editorial states:
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  "The large property owner … has in truth found little difficulty and small trouble in letting his houses all through the war because the demand for houses and flats has far exceeded the supply. That has been the big man's 'smooth' … so if he now gets the 'rough' in the form of 1939 compensation values there should be no weeping and gnashing of teeth."
  Apparently there is a lot of weeping and gnashing of teeth going on among hon. Members opposite lest the big man may be restricted to only an extra 30 per cent. The right hon. Gentleman the Member for Devonport has not said precisely what maximum figure the Government might apply for compensation.
  Mr. Hore-Belisha: The value.
  Mr. Mack: Mr. George Bernard Shaw, in his latest book, says that rich property-owners will do everything in the world for the working-class, except get off their backs. The rich property-owners have had value over and over again. In the City of London there are groups of men who have bought buildings at relatively low prices, and are letting them in the form of flats and business premises for which people are compelled to pay out of all proportion to their real worth because of the shortage of accommodation. There has been no outcry about that. If a man who has milked and mulcted the people of this country for years by what I might term "land grabbage," is to get what is now the value of the land as a result of the community having artificially increased that value, I think that is monstrous and conflicts with the principles of democracy for which we should stand. I wonder whether the hon. Member for Duddeston would be prepared to go to the City of Birmingham and make there, the kind of speeches which he makes in this House, and claim that he is speaking in terms of common sense and equity for the general benefit of the public.
  Major Lloyd: Does the hon. Member realise that every word he is speaking shows that he is so eaten up with venom and dislike of property-owners, that he has lost all sense of fairness?
  Mr. Mack: I have no hatred and no venom, and no complaint against property owners. It is only the way they earn their living that I dislike. I recall a little parody on the lullaby "Hush-a-bye Baby," which I should like to give to the Committee:

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  "Hush-a-bye baby on the tree top
  When you grow up you must work in a shop
  And when you get married the wife must work too
  So that the rich will have nothing to do.
  Hush-a-bye baby on the tree top,
  When you get old your wages will stop,
  And when you have spent what little you save
  It's hush-a-bye baby and off to the grave."
  They are the people we are fighting for to-day. Hon. Members opposite are bursting blood-vessels endeavouring to persuade the people of this country that they are fighting in the interests of democracy. I recognise that, with the best intentions in the World, it is not possible to deal adequately and fairly with every individual case, having regard to all the difficulties attaching thereto. But on a broad basis I think the Government are being highly generous when they say they are prepared to consider 30 per cent. as the ceiling figure over 1939 prices. Even were this to cause certain property-owners, who can well afford it, relative hardship it would, after all, be only a small contribution which they could make towards this war. I am amazed that the right hon. Gentleman the Member for Devonport has sold his mentality to a group of people like hon. Members opposite. If he has any hope of a political future, I advise him to mend his ways.
  3.0 p.m.
  Mr. Manningham-Buller: I do not propose to adopt the same line of argument as the hon. Member for Newcastle-under-Lyme (Mr. Mack). It seems to me that we ought to approach this problem without representing that certain people are fighting for democracy and others for other things. Nor, indeed, ought we to let our judgment on this matter be coloured by the appeal of the hon. Member for South-East Southwark (Mr. Naylor) to hon. Members' better feelings. By all means let us listen to that appeal, but let us consider this when he talks about the incidence of war. What we are trying to arrange for in these Clauses is that those who come back from the war to their houses and homes, and new houses and homes, will receive fair treatment, and no more than fair treatment, when their property is taken over by some "land grabbing"—I think that was what my hon. Friend opposite called them—local authorities.
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  The real reason why I support this Amendment is that it proposes to apply the same measure of justice to all. That seems to me to be the fundamental thing behind this Amendment. How anyone in this Committee—except the Members of the Tory Reform Committee who may support the Noble Lord's view on absentee landlords—can regard the present Clause with approval beats me. I do not understand how it can possibly be said that it is fair compensation to pay banks, co-operative societies, multiple shops and big companies 30 per cent. more than is paid to a private individual who owns one house. Membere of the Tory Reform Committee are, according to my hon. Friend the Member for The High Peak (Mr. Molson), satisfied with this Clause. But how can anyone be satisfied with it? What this Amendment proposes to do, as I understand it, is to apply one measure to all, and not to create an entirely new principle whereby if a person's motor car is taken over by the State he gets the 1939 value plus 30 per cent. if he has been using it for pleasure, but only the 1939 value if he has been running motor cars for hire. That is the principle which the Committee is being asked to remedy in this Clause. Usually we consider what is the value of the thing that is going to be acquired without regard to who owns it. It is quite a new thing to say that because a particular man owns a particular piece of property we will pay him more, or less, than we will pay somebody else who owns equivalent property next door. That is a wrong principle.
  I favour this Amendment because I think we should apply the same standard to all. If the burden on the rates and on the Exchequer is too high to prevent the objects of this Bill from being carried out, let us have a little frankness and let it be said that everyone shall be paid what is fair compensation. The same measure of compensation, be it 60 or 70 per cent., should be paid to all, and we ought not to have this differentiation between different sections of the community. Certain hon. Members opposite think, quite wrongly, that it is only going to hit the great landlords, whom they detest. I take a different view. I think those who will be affected by this are the small people, the people who bought houses and let them, the people who put money

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  into such property with a view to providing for their old age. I really cannot see how we can possibly take the line that it is right to discriminate.
  Mr. Woodburn: May I put a question to the hon. Gentleman? He and the hon. Member sitting next to him both made the point that this was an attack on some section of the community. The hon. Member also made the point that it was a discrimination between rich and poor. Could he tell us in what way there is any difference between a rich investor and a poor investor, as regards the investment side, and a rich property owner and a poor property owner on the other side?
  Mr. Manningham-Buller: I am not sure whether I followed the hon. Member correctly. Quite clearly, it is hard to draw a line between investors as opposed to speculators, but a line is drawn here between occupiers and investors. Why should we pay more to an occupier than to an investor for exactly the same sort of property? The argument is put forward that we pay more to put a roof over their heads. It is a very good argument when it applies to banks and trade unions. I am afraid I have been rather diverted from what I wanted to say.
  Major Thorneycroft: Does the hon. Member mean that he wants to draw a line and not give it to the banks?
  Mr. Manningham-Buller: If my hon. and gallant Friend had listened to what I said he would have heard me say at the beginning that, in my view, we should treat all alike. If we cannot pay them their fair value we should pay everyone on the same standard and on the same scale for equivalent property. That is my argument, and that is why I support this Amendment. In my view the interests of the State must be above the interests of the individual, but the State must have regard to the interests of the individual and this Clause, in its present form, does not. I hope that even now it will not be considered too late to reconsider this matter. We have been told, and quite rightly, that this is a general code of compensation. It is a code which is to last for at least five years. It is to apply to every possible form of public acquisition, and it is nonsense for hon.
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  Members to come forward and say that we must rush this thing through because of the blitzed areas. Those areas will only form a small part of the public acquisitions of land which will take place in the future. I hope the Committee will consider very carefully before rejecting this Amendment, and that the Government will be induced to accede to what it asks: Their second thoughts on this matter are not much of an improvement on their first thoughts.
  Lieut.-Colonel Heneage: I apologise to the Committee for intervening in this Debate, and my only excuse—if I may mention my family—is that we have had experience of housing and land for some hundreds of years. I am against this Amendment. It is impossible, especially in time of war, to be fair to every interest or every individual. Whatever Amendment the Government bring in there is sure to be some inequality to somebody in peace-time, and during and after the war it will be much easier to point out such inequalities. What principle could we adopt to be fair? As property owners we have had some ups and downs and we have tried to be fair to our tenants. We have sold to those who wanted to buy, and so we get owner-occupiers as well as private ownership. Even taking the 1939 value, there will be in some cases gross over-payment. I hope hon. Members will face up to this. If we give the extra 30 per cent., why not give 40 or even 50 per cent.? We shall not get finality. We do not know what conditions will be after the war, and we do not know what the value is to-day. I hope very much that we shall not adopt the Amendment.
  Mr. John Dugdale: With the exception of the hon. Member for Duddeston (Sir O. Simmonds), who said quite honestly that he was in favour of a policy which would be equal both to rich and poor, the majority of those who have supported the Amendment have done so because of the large number—I believe one hon. Member said there were literally millions—of poor people who, they said, were going to suffer through lack of adequate compensation. Have they any figures at all showing the number of people who are likely to suffer? Is it 10,000 or 100,000? I doubt very much if it is. [An HON. MEMBER "What does it matter?"] It matters only

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  because they have based a large part of their case on the argument that millions of people will suffer. I am simply taking their case.
  The right hon. Gentleman the Member for Devonport (Mr. Hore-Belisha) produced the case of a lady who is by now famous throughout all England, the poor widow, who arrived providentially on the scene one Friday afternoon. When we began to examine what her case was we found that, as far as the right hon. Gentleman knew, she did not own the land but only the buildings and that, consequently, out of 63,000 people who, he said, had been disturbed in Devonport a very small majority indeed were in fact like her. The great majority were in a very much better way and could not be described as poor and in need of help. I should like to call the bluff of the movers of the Amendment. Will they agree to the 1939 price, let us say even without the 30 per cent, addition, on condition that all those people who are genuinely in need shall get an addition—[HON. MEMBERS: "Means test."] Certainly. I know it is a means test, but I have not heard any objection to the means test in the past from Members opposite. I would not even suggest a means test of the character that they have been in favour of before, of maybe £1 or £2 a week. I suggest a means test of £20, £30 or £40 a week. That would not bring in multiple stores, banks and many other large organisations. I hope that hon. Members who say they move this Amendment on behalf of the poor will agree to accept such an alteration as I have suggested. If they do, their case is genuine. If they do not, I submit that they are not speaking on behalf of the poor.
  3.15 p.m.
  Major Sir George Davies: The intervention that we have just heard seems to be entirely irrelevant. I agree with him to this extent, that there has been far too much sob-stuff about the poor widow and small investor. That has really nothing to do with the problem at all. We are faced, in what is apparently a small issue, with a matter of grave principle. In the interests of the nation we formed a National Government. People of very varying views and principles on many issues were brought together be, cause they could concentrate on one overwhelming issue, namely, winning the war.
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  The Prime Minister himself said he did not intend, if he could avoid it, to bring in contentious legislation, a mater on which we all agree, but at the same time Measure after Measure of the most contentious nature was brought in and passed with the greatest rapidity, and probably that legislation suffered from being ill-digested. As time has gone on—and whether we are optimists or pessimists about the duration of the war it is obvious that we are five years nearer the end of it than we were five years ago—we have been compelled not only to think out and prepare but to bring in legislation which will come into operation under post-war conditions. The moment we begin to do that we are faced with these matters of grave principle which divide us genuinely—which is, after all, what makes party politics—and that is what we are faced with at the moment. It has nothing to do with the sob-stuff of the poor widows and orphans.
  Many hon. Members opposite take the view that to own property, particularly land, is, if not immoral, unethical in the interests of the State and should be gradually done away with. We hold a diametrically opposite view. But there are certain things on which we are not divided, and I think it desirable to concentrate on them rather than on the issues which divide us very deeply. I think we are at one in this, that we cannot expect that the measure of sacrifice made by all our citizens, whether those who have lost their lives fighting or those who May lose their amenities at home, can be evened up and made good. I think we are all agreed that in the matter that is now before us we want to take every possible measure to see that the speculator is ruled out. I would go so far as to say that I am willing to see certain innocent fish caught in the net if the mesh is small enough to catch the bigger fry. I think we are agreed that justice should be evenhanded and, at present anyhow, that if the State decides that it needs to requisition the property of the individual the individual should be fairly compensated for it and that it should not be expropriated without proper compensation.
  The issue now before us is whether the proposed basis of compensation is fair and equitable. That is what divides us. The Government have pointed out the difficulties of getting a fair market price under present conditions, and we all agree.

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  They say that we must have as a basis the last available occasion on which we could get a fair market price, which is 1939, and we agree. The real question is by bow much shall that 1939 standard be adjusted in order to achieve justice and equity in taking over property. The Government themselves say that as they cannot find out to-day what that figure is they are prepared to take the 1939 standard and, in certain circumstances, to depart from it. They set a limit—a limit of justice—of 30 per cent. How can there be 30 per cent. of justice? Justice is either complete or there is injustice. That is what is dividing us. None of us wants to see the speculator make money. I go further and say that none of us on this side wants to see the genuine investor and the non-speculator get back more than he is entitled to. If a tribunal is set up to decide what amount should be added to the 1939 standard in order to achieve what it thinks is just, how can it be just to say that, if the tribunal decides that it should be 35 per cent. instead of 30 per cent., the individual should suffer the loss of 5 per cent.? This is a real matter of principle.
  May I revert to what I was saying about the basis on which the National Government were formed? We feel on this side, and hon. Members opposite probably feel the same, that in the interests of keeping the Government together as an organisation we have had to make greater concessions, and we feel that we have probably had to make more sacrifice than other parties in the House. Other parties probably feel just the same. That does not alter the fact that we feel that we have, in the interests of keeping the Government Working smoothly, been constantly receding from certain positions which normally we should take up. I have always loathed any form of coalition—
  The Deputy-Chairman: If we are going into the exact form of sacrifice of different parties in order to keep the Coalition together, this Debate will become intolerably long.
  Sir G. Davies: I was leading up to an entirely different point. My point was that in our anxiety to pull together we begin by blurring our opinions, we go on to blurring our convictions, and we end up by blurring our principles.
  Mr. Buchanan: On a point of Order. May I remind you, Mr. Williams, that the initiator of this Debate was really the Prime Minister, and that when he came down to the House and dealt with this matter, one of his basic reasons for doing so was the existence of differences within the Cabinet of a Coalition Government? In view of that statement, which is the basis of what we are discussing, is it wrong for a Member to discuss it on this important Amendment?
  The Deputy-Chairman: That is carrying the matter rather far. The discussion on the bigger and wider issue could come more reasonably when the new Clause is read a Second time. On Committee details such as this Amendment we should not discuss the broad principles of the Government.
  Mr. A. Bevan: On a point of Order. We are having a very wide discussion on the general principle underlying the proposed changes, and if the Government are so heavily embarrassed that the Prime Minister has to come down to the Committee, then I take it that the same restriction will be imposed on his expansiveness as is now being imposed on the hon. Gentleman.
  The Deputy-Chairman: I cannot pledge myself as to the future, but I have no doubt that the Chair will deal with the matter adequately.
  Sir G. Davies: I really wanted to point out that in our anxiety to keep together, we have come precious near to blurring our principles. I feel very strongly in favour of the Amendment, but, on the other hand, I find a difficulty in demonstrating that in the Division Lobby for this overwhelming reason. I believe that at the present time, and particularly with the war conditions in Europe as they are, anything which tends to advertise that the British Government are beginning to lose their firm cohesion will give the greatest encouragement to the forces of resistance in Germany and the greatest distress to the countries which have been liberated or are in process of liberation. Is it not possible for us to reach an amicable solution of this matter which does not strain the loyalties of so many of us? Cannot we meet on the question of speculators and profiteers, and on the question of preventing people making a profit out of the

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  needs of the community on a value that has been created by the community, and, at the same time, feel satisfied that evenhanded justice is being handed out to people, whether they be millionaires or persons on out-door relief?
  Major Thorneycroft: I feel that I owe the Committee an apology for intervening, because I made a speech on the Second Reading of the Clause. I would like, however, to recall the Committee for a moment to the terms of the Amendment which we are discussing and its effect. The effect is that, if there is a piece of property of which it can be shown that the value is higher than in 1939, that higher value will he paid, but if it is lower than the 1939 standard, that standard will still be paid. The right hon. Gentleman the Member for Devonport (Mr. Hore-Belisha) put the argument for it with that dialectical skill of which he is a master. I am a landowner and property owner, not in a big way but with a substantial amount of property. I have a vested interest m this matter, and as a property owner I thank the right hon. Gentleman for the skill with which he has advocated the case. I hope to show that he has put it much too high. He is trying to out-Conservative the Conservatives. He is more loyal than the King. If he is not careful he will jump right over the Conservative Party and end up among the Liberal Nationals.
  Mr. Buchanan: A safe Tory seat.
  Major Thorneycroft: What is this market value which hon. Members are talking about? In my constituency—and I take it only because it is within my personal knowledge—houses worth £600 before the war are changing hands at £1,200 to-day. If that is to be the basis upon which reconstruction is to be paid for, it means that the price is to be doubled. We ought to hesitate a little before we are prepared to impose upon the public a cost of that kind. There is a more serious objection to the right hon. Gentleman's argument. I can understand someone who says that a great principle is involved, that property has always changed hands in this country on the basis of what it would fetch in a free market. But if one is to take that principle one has to take it, win or lose; if property goes up the higher price will be paid, and if property goes down the lower price will be paid.
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  3.30 p.m.
  It is perfectly fair to say, as a matter of principle, irrespective of the injustices and the great unfairness which may be caused: "The principle is so important that I am going to stick to the market value"; but that is not the argument of the right hon. Gentleman. He wants the higher price only when the market has gone up, but he refuses to accept the lower price when the market has gone down. I remember, when the Bill was first introduced, that local authorities issued a manifesto in which they complained bitterly that the 1939 standard ought to have been made a ceiling. Some of my hon. Friends answered that. We said that that would be a case of the local authorities having it both ways with a vengeance; but now the right hon. Gentleman wants to make it a floor. I would say that would be a case of the property-owners having it both ways with a vengeance.
  Lieut.-Colonel Dower: Does not my hon. and gallant Friend realise that the matter is dealt with fully in a schedule, and that if the property goes down in value the price will be decreased?
  Hon. Members: No.
  Major Thorneycroft: All these arrangements are very complicated, but on this issue even I understand them. It is plain that the 1939 standard is taken as a basis. It is plain that if the argument of the right hon. Gentleman is accepted, a higher price will be paid for individual pieces of property. If the price happens to have fallen, the property-owner will still be entitled to rely on the 1939 standard. That is perfectly plain. I do not want to answer all the arguments which have been advanced about owner-occupiers and whether they should be differentiated from owner-investors. We shall have an opportunity of discussing that particular point later on during this Committee stage. I believe that a powerful argument could be adduced for paying to owner-investors rather more than they are to get.
  I was talking the other day to the chairman of a big real-property investment company and I asked him about this matter. He said he thought that the House of Commons generally were not treating property owners too well. I asked him what he would do about it.

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  He started off by abandoning every argument that the right hon. Gentleman put forward. He said that as a matter of capital replacement the 1939 value was perfectly fair and the only value that could be taken. [HON. MEMBERS: "Price."] Well, let me say the only standard that could be accepted. [HON. MEMBERS: "Price or value?"] I have heard enough about "price" and "value." Let me be perfectly frank with the Committee. This gentleman said: "Take the 1939 standard, as set out in the Bill. That is a perfectly fair standard." This is what the chairman of a real-property investment company said, and not a member of the Tory Reform Committee. He works on a large scale. He went on to say: "What do you want to do? If you want capital to be poured into bricks and mortar after the war, and houses and factories and that kind of thing to go up, there is clearly a case for something more than the 1939 standard."
  That is a sound and substantial argument, so far as it goes. It is not, of course, the argument that is put forward by the right hon. Gentleman. It is not an argument as to the justice or fairness of the 1939 standard, but goes to the Government's post-war capital investment policy. That is a different matter. I do not want to elaborate it, but I would just say that in 1938 the people of this country were putting £255,000,000 a year into bricks and mortar, most of it residential property, and that as little as £20,000,000 was spent on plant and machinery. Bricks and mortar are important, but plant and machinery are the things we need to increase our productive capacity. For those reasons I reject the right hon. Gentleman's arguments. The Amend-mend, as it stands, is unjust to the public. If the right hon. Gentleman made it uniform, that is, he made the market value apply whether the price went up or down, it would be grossly unjust to a large number of individuals. I believe that in its present form the Amendment is wholly inconsistent, and conforms to no principle, Conservative or any other, whatsoever. I do not think the Government would be justified in paying more money simply to encourage people to pour more money into bricks and mortar after the war.
  In conclusion, I would recall that it is said that this arrangement is a compro-
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  mise. I do not wish to raise the decent veil that hides Cabinet responsibility and to try to ascertain who said what on a particular occasion, but to some of my hon. Friends this is not a compromise. We arrived at this conclusion independently of the Government, and we think that it is a fair and a sensible arrangement; but if it is a compromise, let us make it a proper one. A compromise demands that both sides should give a little. Hon. Members opposite abstained from voting on the Second Reading and asked that the 1939 standard should be made a ceiling. It would be rather a poor reflection upon us if, towards the end of our discussion, a section of the Conservative Party were to abstain from voting, or were to vote against the Government, saying that the 1939 standard ought to be a floor. Surely we can both give a little away, in order to arrive at some sensible arrangement in this matter.
  I was a landowner. Hard things are said about landowners and have been said in this connection. I believe that the agricultural landowners of this country have been of some service to the community in the past. They have not expected the last penny in rents and they have had a high sense of public duty. To-day we are engaged in a great war in which immense sacrifices are being asked from everyone. Landlords do not want their last pound of flesh in this matter. Compromise means that all of us are to get rather less than we desire or perhaps think that we deserve. Compromise may not be such a bad quality. It is on those grounds that I beg the right hon. Gentleman not to press his Amendment to a Division.
  Mr. A. Bevan: I wonder why it has been left to a back bencher of the Conservative Party to deliver a speech which rallies, or attempts to rally, the supporters of the Conservative Party behind the Government. I wonder where the Prime Minister is. We have not seen him so far, although he was in the House this morning. He came down the other day to persuade Members of this party to agree to the postponement of the Clauses which we are now discussing, but we have not seen him come down for the purpose of persuading the Members of the Conservative Party, of which he is the Leader, to abstain any further from the obstruction of the Bill. We do not yet know

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  whether the right hon. Gentleman who moved the Amendment proposes to carry it to a Division. If we are not to have a Division after all this hullabaloo, it really is a waste of time. Is all this just mock fighting? Is the right hon. Gentleman going to lead his legions into the Lobby? We have not heard so far.
  We have not heard whether the Amendment is to be supported by the Conservative Party. I would like to know what is proposed. We have not heard any argument over and above what we heard before. The right hon. Gentleman made a speech a short while ago, and I ventured at that time to answer him, and I have not heard any new argument whatever to show why we should support the Amendment to-day, having opposed the same proposal the other day. I wonder why certain voices have been silent. I was expecting to hear a speech from the hon. Baronet the Member for Moseley (Sir P. Hannon). I was expecting to hear a speech from the hon. and gallant Member for Hornsey (Captain Gammans). He was here earlier but he is not here now.
  Sir Patrick Hannon: May I interrupt my hon. Friend to ask him on what consideration he based his assumption that I would contribute to the Debate?
  Mr. Bevan: I am very grateful for the interruption. It enables me to tell the Committee why I thought the hon. Member ought not to have withheld his counsel from us. I see that the National Federation of Property Owners, in their journal called the "Property Owners' Gazette," claims him and the hon. and gallant Member for Hornsey as members of the National Executive, and I was therefore waiting, I have been waiting patiently for hours, for either of them to make a speech.
  Sir P. Hannon: May I point out that the Debate is still in progress?
  Mr. Bevan: I shall hope to receive the gratitude of the Committee if I can induce the hon. Member to make a speech. He has not so far attempted to catch the Chairman's eye. The reason why I mentioned both hon. Members in this connection is not only because they are members of the Executive Committee of the National Federation of Property
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  Owners, but because this journal, in its October issue, claims to be the inspiration behind the Amendments which we have been considering during the last few weeks. The editor, with a natural pride, which must be an embarrassment to his associates, says:
  "The Parliamentary Committee of the Federation has carefully examined the Clauses of the new Bill and, with a view to moulding this important piece of legislation so that its provisions will be equitable and fair to all concerned, has deemed it necessary to urge certain amendments."
  Then later on is pointed out the particular Amendment we are now considering. [HON. MEMBERS: "Why not?"] I agree, so long as we know the source of it. I do not mind property organising itself.
  Lieut.-Colonel Dower: There are two Amendments being discussed. Is the hon. Member saying that either the right hon. Gentleman who moved the first Amendment or myself—as the second Amendment stands in my name—are members of any property owners' association, because we are not?
  Mr. Bevan: Of course, the hon. and gallant Member has not been exalted to membership of the executive, but I think his services during the course of this Bill deserve recognition, and I hope they will be brought to the attention of the organisation. He has done very well. I have noticed on several occasions in the course of the Committee stage that manuscripts have passed from there to here. As a matter of fact at one time last week we thought we were a postal service—
  The Deputy-Chairman: We must not now discuss a postal service.
  Mr. Bevan: You are too quick for me, Mr. Williams. I have not finished the sentence. In any case the fact is that this magazine, which I recommend to the attention of hon. Members, claims to be the inspiration, very substantially, for the Amendment which has been moved, but not its precise terms. All they ask for in their magazine—my right hon. Friend has excelled himself, because he wants even more than they do—is that there should be an up and down provision in the Clause. The spokesman of the Tory Reform Committee was nearer to being the champion of the Property Owners' Federation than my right hon. Friend.

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  He went far beyond them because they say here:
  "Consequently, the Federation has urged an amendment to Clause 45 that: 'in determining the price to be paid, regard shall be had to the reduction or the addition of such percentage thereto as may be represented by the increased or reduced purchasing power of currency. …"
  which is what my hon. Friend mentioned just now. My right hon. Friend has gone beyond that. He wants to abolish the ceiling and keep the floor, so that in his enthusiasm he has even exceeded the enthusiasm of this property owners' association. I have always known my right hon. Friend could improve on any of his advisers.
  3.45 p.m.
  What are we, in fact, being faced with at the present time? I should say one of the ugliest incidents in the history of parliament in the last three or four years. There is a point made by some of my hon. Friends opposite who say that one form of property should be treated equitably as against another form of property. As between property owners it is a good argument, but let them go and settle it. Do not worry us with it. Let all the property owners have a meeting and settle the terms upon which some of their number are to be bought out. It is not a matter for us. If the system of taxation were equitable—
  Sir P. Hannon: Surely, if my hon. Friend will forgive me, this is the supreme council of the nation for the distribution of justice among our people, and we are asking that it should be so to-day.
  Mr. Bevan: Certainly it is the supreme council of the nation for the distribution of justice—not swag. This question of equity in the treatment of property must always arise when the State wants to take over private property for the use of the State. It must always arise if the State steps in and says to one man "We are going to take your property for communal purposes." It must necessarily follow that the person concerned asks himself how his property is being treated as against that of other property owners who are being allowed to retain their property. It is therefore merely a question of equity between the property owners themselves. It is not a question which arises between those who do not possess property and
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  those who do. If we had a system of taxation by which hon. Members who possessed property could compensate property owners whose property they took over it would be all right. If we had some system of redundancy, as in the licensing trade, as an hon. Friend reminds me, that would be all right; but with our indirect taxation and Income Tax on low incomes any compensation to property owners will be given to them at the expense of the poorer members of the community. It is also true that many local authorities will have the cost of rebuilding added to by the compromise already made, and any compensation we give for property taken over.
  In point of fact, we are faced with the situation that it is not merely a quarrel between the property owners themselves that we are witnessing, but a question of the extent to which the poorer members of the community shall be mulcted to give compensation to certain property owners. That makes us intervene in their quarrel. Otherwise, I should have been delighted to sit here and watch the squalid scramble that we have been witnessing to-day. I cannot do that, because, unfortunately, we may have to foot some of the bill. Hon. Members have been bemoaning the hardships of certain persons who have, in the meantime, acquired property. Have we on this side not been asking ever since 1939 that the Government should pass a law fixing 1939 values and prices? [An HON. MEMBER: "And wages."] If hon. Members can put live wages, paid to living men and women, on the same basis as dead property, let them have the comparison. The fact is that we asked that a ceiling should be fixed and that those who bought and sold property in the meantime should be told that they did so at their own risk. Five years afterwards Conservative Members are faced with the consequences of their own negligence—because they have had a majority. After-five years of that sort of behaviour, we are now asked to spend our time discussing the woes of those persons who have taken advantage of the situation to buy property.
  I sometimes envy hon. Members opposite. I wish I could persuade some of my friends on these Benches to pursue their policies with the same ruthlessness and disregard for ethics that hon. Members opposite show. I wish I could

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  persuade them to display the same hardness. The trouble is that this party is inclined to be hard on the outside and soft in the centre, while the other party is soft on the outside and hard in the centre, always pursuing its purposes ruthlessly. In the last few days we have seen this piece of important social legislation held up by persons claiming consideration for certain special categories of property owners. I do not know about hon. Members opposite, but my letter bag is full of letters from members of the Services, who are asking what is to happen to them when they come back. [Interruption.] What did the Parliamentary doodlebug say?
  Mr. Bartle Bull: I only said that I wished the hon. Member would spend more time reading all those letters, instead of talking to us.
  Mr. Bevan: That was a doodlebug that did not go off. I have had letters from Burma and India asking what is to happen when the writers come home. I think hon. Members ought to have some sense of social responsibility. Some of these men in the Forces are asking whether they will find, when they come back after three, four, five or six years in Burma, India or the Middle East, that their chances at home will have been either helped or hindered by what we do here. I think the House of Commons displays a disgraceful spectacle; because a few years ago it was we who called up those men and sent them out there, entirely regardless of the effects upon themselves and their families. It was we who smashed small businesses and took young men from their university careers and from their apprenticeships, and sent them into the Services, in an hour almost—in one afternoon. We were told by the Government that we must not delay, that the need of the country was so great that we could not even wait, in accordance with ordinary Parliamentary procedure, to discuss whether we should take those young men. Now we have been spending six weeks listening to hon. Members opposite pleading the cause of property owners, pleading for the right to put heavy burdens on those young men when they come home, pleading that property is bleeding, while our young people are dying on the battlefields. It is time that somebody exposed this squalid ugliness for what it is. It is time that people here
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  understood what the men in the Forces are saying. When the General Election comes, all those who to-day—
  Mr. Manningham-Buller: Is it in Order on this Amendment to discuss the next General Election?
  Mr. Bevan: Hon. Members are either wasting their time, or they are going to vote. If they are going to vote, those votes will be put before the electors at the next General Election, and the electors will form their judgment upon them. I warn hon. Members opposite that if what we hear from the Forces represents their paint of view at the present time, they will deal with those who hold up this Bill.
  Commander King-Hall: Is the hon. Member aware that my correspondence from the Forces shows their extreme distaste for both political parties?
  Mr. Bevan: The hon. and gallant Member is working hard to find a piece of political territory for himself, but so far he has failed to do so. It is an extremely ugly and unpleasant situation that this Bill should have been held up so long, not by the physical difficulties of replanning the homes of the people of Great Britain but by the squalid claims of many of those who, behind hon. Members, are hoping to reap advantages from the sufferings of the people.
  4.0 p.m.
  Mr. Erskine-Hill: I am going to follow the hon. Member for Ebbw Vale (Mr. Bevan) by saying that I hope the Committee will not lower themselves to the standard of imputing motives to other people. In the first place, they are entirely unjustified, and, in the second place, the Committee has most serious principles to discuss. I have waited, and waited in vain, from the time of the Second Reading, for any indication from the Government, in any satisfactory sense, of the answer to three most vital questions, and those questions are these: Why were the 1939 prices taken, when the Uthwatt Report had recommended 1939 values? Surely, if the Government were departing from the Uthwatt Report, they ought most clearly to explain why they were doing so, and to that point, so far, there has been no answer.

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  The second question is, Why should the figure of 30 per cent. be taken? I can perfectly understand the acute sense of pleasure which the hon. and gallant Member for Stafford (Major Thorneycroft) and the hon. Member for The High Peak (Mr. Molson) have in the fact that their particular figure should be taken. I am not really very interested in what figure is taken until we have a satisfactory explanation why the figure is placed at 30 or at any percentage, because, unless the idea of the Government is that it is a fair value, representing the criterion laid down by the Chancellor of the Exchequer in his speech on the Second Reading, then I should see no virtue in 30 per cent. or in any other percentage. The third, and, in many ways, most important point is this. So far, we have had no explanation of why there should be any differentiation between the owner-occupier and the owner. I think the Committee are entitled to press the Government to put something forward which we can all understand on this differentiation.
  I would remind the Committee of the explanations which have been given so far. The Chancellor of the Exchequer said that the 1939 prices ought to be given because there were people whose houses had been taken over in 1939. Of course there were, and nobody here would object to the 1939 prices being given in 1939. Similarly, we would expect, and we will await what the Government have to say about it, that 1943 prices ought to be given in 1943, because that was the basis upon which the Chancellor of the Exchequer rested his argument. I am entirely in agreement with some of my hon. Friends who said they wanted to regard this question as a matter of principle and not one of raising hard cases. I entirely support that, but I want to point out something which is more than a hard case. What have we, in fact, done at the moment? We have allowed the co-operative stores, the banks and large businesses to come in as owner-occupiers, and the small working man, who has saved his money and put it into a house, and there are many thousands of them, if we leave this thing as it is, is in the same category. But many men who have gone out from this country to fight in Burma, Italy and France have had to
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  let their houses while they are away. They will not be covered by this Bill, and while we must not make hard cases and try to appeal to sentiment unduly, these are facts which this Committee must realise and about which it ought to do something.
  I do not care whether the 1939 value is called a floor or a ceiling. What I want to see established is that principle which has, broadly speaking, governed compensation for the last 100 years, the basis of which is that, when somebody's else's property is taken away he is given the full value of it at the time it is taken over. I want to make an appeal to the Committee, because I regard this as a matter of principle. If in this Commitee we are going to depart from what has been the custom of our country, based on fair play, we must realise that, without a mandate from the people and while the war is going on, we are going to depart from a principle which has governed the necessity for fairplay in this country for many years.
  Mr. Kirkwood: Had we a mandate from the people for declaring war, or for conscripting the youth of the country? There was no mandate for that.
  Mr. Erskine-Hill: We had a mandate to carry on this war which was entirely in keeping with the views in this speech. Of course, we ought to listen to what the Government have to say, and I hope they will give a clear answer, but I think the Committee are entitled to ask for that answer, and, unless it is satisfactory, I think we ought to take a line on this matter. I differ from the hon. Member for Peckham (Mr. Silkin), who in a very early stage of the Debate said that if any more Amendments were accepted by the Government to increase the cost to the local authorities he would vote against the Bill on Third Reading. I purposely avoided voting on the Second Reading, but this Committee stage is the stage where the House of Commons has a duty to speak its mind and act as its conscience demands. If this principle were departed from, then no Committee stage would be of any value to this House, and so I recommend to hon. Members that they should think very carefully on this matter, which raises questions which are going to affect the future for so long.

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  We are supporters of the Government—at least, I hope we are—but we must face this issue as a Committee question in the House of Commons where a matter of vital importance to a great many people throughout the country is going to be decided. For myself, unless I have a very satisfactory answer from the Government, I feel that it is a matter of principle on which we should support the Amendment in the name of my right hon. Friend opposite.
  Mr. W. S. Morrison rose—
  Mr. MacLaren: On a point of Order. Does this end the Debate?
  The Chairman: No.
  Mr. MacLaren: As long as that is understood I give way.
  Mr. Morrison: I intervene at this stage because we have had a long Debate and it might be an advantage if I said a few words now. I have listened to everything that has been said and I must say that this is a subject which does produce a very good Debate. There are issues on which hon. Members feel they are on familiar ground on both sides, and it is natural that the Debate should go on without any drying up of the spirit of controversy or of language appropriate to it. My hon. and learned Friend the Member for North Edinburgh (Mr. Erskine-Hill), who has just resumed his seat, asked me three questions, to which he said he had had no answer from the Government spokesmen.
  He then proceeded to give us, very fairly, the answers which have been given to the three points which he made and said that he was dissatisfied with those answers. If my hon. Friend wants to get some other statement from the Government I can tell him quite straight that the answers which my right hon. Friend the Chancellor of the Exchequer and I gave on the last occasion on which we met are the same answers as I shall give to-day. They were, in fact, the true reasons and the true justification of these Clauses, and the true justification and the true argument behind the proposition cannot be waived and altered to meet some temporary and passing situation. We try to put fairly before the Committee the reasons which prompted us to take the course we suggested and
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  leave the Committee to judge whether we are right or not. The point he made about the absent soldier arises on a subsequent Clause, and I think he will find that His Majesty's Government have not been careless of that interest.
  We have had a long Debate, and I hope that it may, if we come to a decision on the issue raised here, facilitate our proceedings when we come to other Clauses. There is a feeling of misgiving in some parts of the Committee that, in adopting the 1939 standard of prices, they are drifting away from old and familiar things and a fear that an injustice will be done. If they drift away from current market value, they have a feeling that they are drifting away from an anchorage which in the past has been sufficient to secure justice as between His Majesty's subjects and any public acquiring authority. I would like them to ask themselves this simple question: If they stay by the old anchorage in the peculiar circumstances in which we are, will they get justice? The answer is convincingly evident to me, and I am as anxious to see justice done as any other hon. Member. The answer is quite clear and plain that, if you refer to the current market to-day or to the period of commotion and turmoil of mercantile forces which necessarily lies ahead of us, you will make your criterion something quite capricious, and, as it is capricious, unjust in its application as between man and man.
  The point was recognised by the right hon. Gentleman. I made it abundantly clear when I spoke earlier in our proceedings to-day that we are doing this thing ad hoc to meet this situation. It is an unprecedented situation. It has never happened before. Any hon. Member or party or group of Members who will not adapt themselves and use their ingenuity with the desire to achieve justice and propound policies which face the facts of the situation as it exists and which cannot be escaped are not, in my estimation, facing the practical issue. In my estimation any hon. Member or Minister or Government who preferred to rely upon some well-founded, very well-liked and tested maxim of the past, if they would not meet the facts, would be doing wrong and not right, and running away from the difficulties. So much for that general situation, and why we must go back to a

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  stable market. That is abundantly clear, and from the speeches to which I have listened to-day, I feel that the majority of the Committee, however much they may differ on other points, are certain that that is the only way we can face the problem of valuation as it presents itself to-day.
  4.15 p.m.
  My right hon. Friend the Member for Devonport (Mr. Hore-Belisha) moved the Amendment and I must, to do him justice, deal with the argument he advanced. After all, he is the leader of an important group of Members for whom, as for him, I have a high respect, and his demand deserves careful consideration at my hands. I think that the right hon. Gentleman agreed with me that there is no firm basis in modern market value. He sought to say that what was substituted for current market value, namely, the 1939 market value was unfair because of the next succeeding Clauses where we provide for an increase over the 1939 values in certain cases of owner-occupiers. He said that that was an admission that the absence of some such provision for the investor-owner meant injustice. I would like him and the Committee to follow this carefully. The owner-occupier is two persons in one. He is the owner of the land and at the same time he is the occupier. The proposed increase in his case is not given to him as the owner of the land. He is treated just the same as any other owner. It is given to him solely because he is the occupier. That is why the chance of something extra—
  Mr. Pickthorn: Is it not given as part of compensation for a piece of real property?
  Mr. Morrison: All compensation which is given in respect of real property is given in respect of the various interests in that property. The special compensation for the owner-occupier is given not because he is the owner of the land, but because he is the occupier.
  Lieut.-Colonel Dower: Is my right hon. Friend suggesting—
  Mr. Morrison: If my hon. and gallant Friend will allow me to develop my argument, perhaps he will understand it. This is the argument and it can be plainly stated. My hon. and gallant Friend shakes
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  his head. I ask him not to anticipate the processes of reason. This is a proposition and I am putting it forward to the Committee like any other hon. Member.
  Under the system of land compensation which existed before the war under the Lands Clauses Act, the occupier, if he was turned out of premises by compulsory purchase, was entitled, in addition to the purchase of the value of his interest, to certain other forms of compensation. The one that is relevant for the purpose of my argument was called "compensation for disturbance." That was because he was the occupier. He was in a certain place and had to take up his roots and go somewhere else. It has always been recognised, and in the case of traders, for example, it is always recognised, that the uprooting of a man who is in occupation gives rise to claims for compensation in excess of the value of his interest in the land. Under that system, as it existed before the outbreak of war, if we gave a man the market value of his interest, plus compensation for disturbance, the market value would enable him presumably to find an equivalent piece of land in open market. His compensation for disturbance on top of that would enable him to get over the ill effects of being forcibly uprooted and placed somewhere else. These two things together work out under the old law.
  Sir John Mellor: Would my right hon. Friend allow me at this point to ask him whether the 30 per cent. is intended to be in addition to the compensation provided in Sub-section (5) of Clause 27, which provides that the local authority may give compensation for the disturbance of a man's business and the consequent taking over of his premises?
  Mr. Morrison: My recollection is that Clause 27 enables a local authority to make certain payments for removals, and so on, and for business compensation.
  Sir J. Mellor: Would my right hon. Friend look at Sub-section (5)? It deals, first, with removals and then goes on to deal with compensation for the disturbance of his business. Admittedly, it does not deal with disturbance of his residence.
  Mr. Morrison: I am surprised that my hon. Friend should drag in something which is irrelevant. In that case you

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  would be purchasing his livelihood—I am dealing with the case of a residence—in respect of which, up to the outbreak of war, we had a system under which the occupier was given any disturbance compensation in addition to the market value of his land, and by which you could be relatively sure that the man was compensated in all respects. We are adopting here not current market values but the 1939 market value as our criteria. That is different from the pre-war system. We are forced to that, because there is no current market value that would be just and, when we have taken that step, we provide for the owner-occupier also in respect of his occupation, and any possible excess claim for disturbance in respect of this additional thing. Surely it must be abundantly clear—
  Sir Irving Albery rose—
  Mr. Morrison: I must develop this argument if my hon. Friend will allow me. The argument leads me to this conclusion, that those who say, as my right hon. Friend did, that because we are giving something extra for the owner-occupier therefore we should in all honesty give something to the investor-owner, are missing the true point and purpose of the extra payment which is in respect of occupancy and not of ownership.
  Sir I. Albery: Could I put a point on that? I understood the right hon. Gentleman to say that this extra 30 per cent. is compensation for the owner-occupier because he has to leave his premises. Take the case of another house, the investor's house, which is taken over and the occupier has to leave it. He is just as much turned out as the owner-occupier. What kind of compensation does he get?
  Mr. Morrison: If the occupant in that case has a compensateable interest in the property, and is the owner of that, he is, for the purposes of the actual payment, the owner-occupier of the house.
  I want to say a word about the next step in the argument of my right hon. Friend but I hope the Committee is satisfied there is no substance in the contention that because we are doing something for the owner-occupier in respect of his title as an occupier that vitiates the proposals made for the investment-owner. There is no ground for that argument. The next argument on which my right hon. Friend
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  founds himself is the recommendation of the Uthwatt Committee for values and not prices. However, I would have him reflect that the Uthwatt Committee proposed as a ceiling what we are proposing as a standard. They said that we should not pay more than sums based on the standard values in any case and, had the Government accepted the recommendation exactly as it stood, it would have been open to any purchasing authority to come along, and if the price had been depressed by the war below that ceiling, it could have bought compulsorily at that price.
  It is a very different proposition that we are putting before the Committee. We came to the conclusion that the idea that the public should take advantage of every incident of war, every hazard of our common struggle which depresses the price of a man's land or one of its concomitants and that we would let the local authority take advantage of that and dispossess him at a temporarily low and depressed value, was not a fair proposition. No Government can take upon itself, or could discharge, the task of putting everything as it was before after a struggle of these dimensions, but we say that it is not fair that a man should suffer from a temporary depression in the value of his land through the war, we will go back to a fair market value and give him a price for that. Now, however, my right hon. Friend comes along and ignores the vast improvements in the prospects of many owners which that means, whose land could have been snapped up at knock-out prices, and because we have made what was the ceiling a floor, the right hon. Gentleman says, "Now you must build on that with an endless series of Jacob's ladders and escalators with no top and no control over them at all." So I find myself in the position of saying that is not fair, and I venture to say that investor-owners, with which this Clause deals very largely are, in many cases, in a much more favourable position than many business investments which have suffered as a result of the war. I do say that if, after this struggle, an investor can get back approximately to his 1939 position, he is not doing too badly. There are many People who have not done so well as that and who make no complaint about it.
  The right hon. Gentleman also mentioned improvements and said that they were ignored except in the case of the special Clause. That is not so. If he reads

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  the Clause he will find that the interest to be acquired is to be varied in the condition in which the property is at the date of the notice to treat with all its improvements, and then valued at 1939 prices for the land as it has been improved. But it is because we do say that during the war many improvements have been made which a prudent man would probably not make of his own volition in peace-time but has done them as a citizen to help the war effort, that we make the provision which is in the next Clause.
  I would like to deal with my hon. and gallant Friend the Member for Penrith (Lieut.-Colonel Dower), who has had many an argument with me in the course of these arduous discussions, but always friendly ones. He brought up the question of death duties, and those are the subject of a separate Amendment, so perhaps we had better leave them until it is reached. He said that this was "Goodbye to fair compensation." Sir, it is good-bye to unfair compensation for this period and, when the emergency is over and things settle down, then we can discuss what it is fair and proper to do.
  My right hon. Friend the Member for South-West Bethnal Green (Sir P. Harris) voiced a criticism against this Bill and the Clauses in particular relevant to it. I think my hon. Friend the Member for Walsall (Sir G. Schuster) also picked that up—would it not have been better if we had dealt with the whole of compensation and betterment and all the control of land, and so on, in the White Paper? I ask the Committee to reflect. Getting this Bill along has not been a light or easy task. Had we cluttered it up with all these vast problems—
  Sir P. Harris: I never suggested that. On the contrary, I am supporting the right hon. Gentleman. What I said was that it would have been much wiser to introduce earlier a full compensation Bill dealing with the whole problem but, in the light of the circumstances and the emergency of the Bill, I was backing him. I thought I made that clear.
  Mr. Morrison: I am very glad to hear that.
  Sir G. Schuster: What I said was that the Government would have been much wiser to do what the Prime Minister sug-
  268
  gested, have a separate Compensation Bill instead of dealing with compensation in two omnibus Clauses.
  4.30 p.m.
  Mr. Morrison: That raises a different question. So long as I have cleared the reputation of my right hon. Friend from a suggestion which would have been impossible to carry out I am satisfied. So far as my hon. Friend the Member for Walsall and the National Liberal Party are concerned, I hope that it is within our compass to do this thing now. I would not lightly abandon the chance of doing what I think right.
  My Noble Friend the Member for South Dorset (Viscount Hinchingbrooke) made a speech with which we are, no doubt, greatly in sympathy. He went into very wide issues, and as a foretaste of the political philosophies which may govern our future action I am sure that his contribution was listened to with sympathy and attention. But I wish to say once again that what we are doing here is tackling the immediate and practical problem of getting an ad hoc solution to a very difficult question. All I am asking is that Parliament and this Committee should help us towards getting a solution that will be in time for the work of reconstruction to start when it should start. My hon. Friend the Member for Daventry (Mr. Manningham-Buller), whose contributions to this Debate have been very well put together, seemed to think that there was some discrepancy between what is proposed here and the measures of compensation which are on the Statute Book as regards ordinary property. I can assure him that that is not so. As a member of a learned profession it will be sufficient if I refer him to the Statute which governs it. It is the Compensation Defence Act, 1939, and the relevant Section is Section 4, Sub-section (7), which states:
  "Compensation payable under this Act in respect of the acquisition of any vessel, vehicle or aircraft shall be a sum equal to the value of the vessel, vehicle or aircraft immediately before the acquisition, no account being taken of any appreciation due to the emergency …"
  That is precisely the spirit of what we are trying to do. This great struggle has involved catastrophic changes in values. One man has had his property elevated and another depressed. Let us, so far as we can, disregard these changes.

  269
  I would like to say a few words to my hon. Friends who are particularly concerned with the position of the investor in land. I call attention to the very welcome speech of my hon. and gallant Friend the Member for Louth (Lieut.-Colonel Heneage). He and I have been in the House a long time together on the same side and he is, as we all know, one who speaks with knowledge of land. He said that taking the long view of these matters the propositions in the Bill were fair. I take the same view. Investment in land is a long business. Prices rise and fall through temporary causes over a period of years, but the investor in land is concerned with the long-term proposition; he is not affected by temporary swings, such as those which distress the holders of personal property when stock market prices vary from day to day. Can anyone say that to give 1939 prices for a long-term investment of that character is unfair? Hon. Members may point to some instances where land could be sold for more; I could point to many where it could be acquired for much less. There are many influences which depress the price of land, and one is the time-lag before the land can be developed. I share the view that in its main application to the investor in land the propositions in the Bill are fair.
  I have failed to hear yet any argument which has met that put forward by my right hon. Friend the Chancellor of the Exchequer over the price to be paid for land acquired during the war. The argument is, in brief, this: My right hon. Friend said that if land had been taken in 1930 or 1940, when there had been no appreciable change, the 1939 price would have been paid, and the citizen would have been amply and fairly rewarded and would have agreed that he had been fairly treated. But because you take his land at a later period in the same emergency, when the influences affecting the price are solely due to war, what justification is there for paying him more than the 1939 price because you require the land for public purposes merely at a later date? I cannot see it.
  My hon. and learned Friend the Member for North Edinburgh (Mr. Erskine-Hill) said that the citizens should have got the 1943 price. To carry that to its logical conclusion would be the worst way of dealing with the investor in land.
  270
  It is quite natural that all of us who have been waging party warfare for many years should feel in a discussion of this sort the drag and tow of old political affiliations. We would be less than human and less than politicians if that were not so. No doubt we think from time to time of what our constituents and supporters will say about our action in this matter—a view I have heard expressed. But what do the people of this country, the ordinary people who carry the country on their backs, fight for it and sustain it, not those who have exaggerated or enthusiastic affiliations to one side or the other, expect of us in this House? Do they wish us in this time of emergency to be true to some political affiliation? No. They expect us to settle this. They say, "We sent you to Parliament to arrange these things. We are less interested in the exact political colour or tint of the arrangement than that you should do the work for which we sent you to Parliament, namely arrange these things as best you can." That is what we are trying to do.
  I am very anxious that the work of reconstruction shall be put in hand as early as possible—and no time is too early for this great task. I know that that task will be rendered much easier and be much accelerated if we can settle this between us on a fair basis, so that local authorities can begin to count the cost and the ordinary citizen will know his position in future. I am as keen as anyone on a man who sticks up for his political principles, but I cannot dissociate myself from the environment of the particular moment, the position of this Parliament, the particular task that lies before it and the absence of the old guide posts which we followed so safely and for so long. I wish to be true to the times, and I ask the Committee to reject the Amendment without a Division.
  Sir P. Hannon: I intervene only to express a view entertained by a large number of Members. We were all very much impressed with the speech of the right hon. Gentleman the Member for Devonport (Mr. Hore-Belisha), and of course the principle that he sought to establish is one that must make an overwhelming appeal to the spirit and life of the nation. The idea that nobody in this land of ours

  271
  should be deprived of his property without adequate compensation, is one that must make a convincing appeal to everyone. But the speech we have just heard must make us feel that the Government have done everything conceivable, within the limits of justice and equity, to meet the claim established by the right hon. Gentleman opposite. Many of us in this crucial moment, when we are fighting for our lives, are animated by this feeling—that it would be a national misfortune if we were to divide our counsels at this crisis. I look at the Prime Minister on the Front Bench. Every one of us must feel the burden that he has borne for
  months, and the strain through which he has gone. Every one must feel the immensity of the responsibility that rests upon him. I suggest that the Committee should not take any step which would embarrass the great work that he has to accomplish. I suggest that we should respond to the Minister's appeal and not divide the Committee, on a matter which must make a profound and disturbing impression throughout the whole of the United Nations.
  Question put, "That those words be there inserted."
  The Committee divided: Ayes, 58; Noes, 324.

  Division No. 40.]

  AYES.

  [4.45 p.m.

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

  Hopkinson, A.

  Scott, Lord William (Ro'b'h & Selk'k)

  Beamish, Rear-Admiral T. P.

  Hore-Belisha, Rt. Hon. L.

  Shaw, Capt. W. T. (Forfar)

  Bower, Comdr. R. T. (Cleveland)

  James, Wing-Com. A. (Well'borough)

  Simmonds, Sir O. E.

  Braithwaite, Lt.-Cdr. J. G. (H'der's)

  Joynson-Hicks, Lt.-Comdr. Hon. L. W.

  Smithers, Sir W.

  Campbell, Dermot (Antrim)

  Keeling, E. H.

  Stewart, J. Henderson (Fife, E.)

  Channon, H.

  Kimball, Major L.

  Stourton, Hon. J. J.

  Doland, G. F.

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

  Studholme, Major H. C.

  Donner, Squadron Leader P. W.

  Lewis, O.

  Tasker, Sir R. I.

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

  Little, Sir E. Graham (London Univ.)

  Taylor, Vice-Adm. E. A. (P'd'ton, S.)

  Duncan, Capt. J. A. L. (Kens'gt'n, N.)

  Lloyd, Major E. G. R. (Renfrew, E.)

  Thomson, Sir J. D. W.

  Emery, J. F.

  Lyons, Colonel A. M.

  Thornton-Kemsley, Lt.-Col. C. N.

  Everard, Sir W. Lindsay

  Manningham-Buller, R. E.

  Touche, G. C.

  Fox, Squadron-Leader Sir G. W. G.

  Mellor, Sir J. S. P.

  Wayland, Sir W. A.

  Galbraith, Comdr. T. D.

  Mills, J. D. (New Forest)

  Webbe, Sir W. Harold

  Gammons, Capt. L. D.

  Nall, Sir J.

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

  Gower, Sir R. V.

  Petherick, M.

  Wright, Mrs. Beatrice F. (Bodmin)

  Greene, W. P. C. (Worcester)

  Pickthorn, K. W. M.

  Gretton, J. F.

  Power, Sir J. C.

  TELLERS FOR THE AYES:—

  Grimston, Hon. J. (St. Albans)

  Ross Taylor, W.

  Mr. Erskine-Hill and Captain

  Guest, Lt.-Col. H. (Drake)

  Royds, Admiral Sir P. M. R.

  Cobb.

  Holy-Hutchinson, M. R.

  Scott, Donald (Wansbeck)

  NOES.

  Adamson, Mrs. Jennie L. (Dartford)

  Boyce, Sir H. Leslie

  Cook, Lt-Col. Sir T. R. A. M. (N'flk,N.)

  Agnew, Comdr. P. G.

  Brabner, Comdr. R. A.

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

  Albery, Sir Irving

  Bracken, Rt. Hon. B.

  Cove, W. G.

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

  Briscoe, Capt. R. G.

  Cox, Captain H. B. Trevor

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

  Broad, F. A.

  Cripps, Rt. Hon. Sir Stafford

  Anderson, F. (Whitehaven)

  Broadbridge, Sir G. T.

  Critchley, A.

  Anderson, Rt. Hon. Sir J. (Sc'h. Univ.)

  Brooklebank, Sir C. E. R.

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

  Aske, Sir R. W.

  Brooks, T. J. (Rothwell)

  Culverwell, C. T.

  Astor, Viscountess (Plymouth, Sutton)

  Brown, Rt. Hon. E. (Leith)

  Dagger, G.

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

  Brown, T. J. (Ince)

  Davies, Major Sir G. F. (Yeovil)

  Attlee, Rt. Hon. C. R.

  Brown, W. J. (Rugby)

  Davies, R J. (Westhoughton)

  Balfour, Capt. Rt. Hon. H. H.

  Buchanan, G.

  Davies, S. O. (Merthyr)

  Barnes, A. J.

  Bullock, Capt. M.

  Denville, Alfred

  Barr, J.

  Burden, T. W.

  Dobbie, W

  Barstow, P. G.

  Burke, W. A.

  Douglas, F. C. R.

  Beattie, F. (Cathcart)

  Burton, Col. H. W.

  Drewe, C.

  Beauchamp, Sir B. C.

  Butcher, H. W.

  Driberg, T. E. N.

  Beaumont, Maj. Hon. R. E. B. (P'ts'h)

  Butler, Rt. Hon. R. A.

  Duckworth, Arthur (Shrewsbury)

  Beech, Major F. W.

  Cadogan, Major Sir E.

  Duckworth, W. R. (Moss Side)

  Beechman, N. A.

  Campbell, Sir E. T. (Bromley)

  Dugdale, John (W. Bromwich)

  Bellenger, F. J.

  Cape, T.

  Duncan, Rt. Hon. Sir A. R. (C. Ldn.)

  Bennett, Sir E. N. (Cardiff, Central)

  Cary, R. A.

  Dunn, E.

  Bernays, Captain R. H.

  Chapman, A. (Rutherglen)

  Eccles, D M.

  Bevan, A. (Ebbw Vale)

  Chapman, Sir S. (Edinburgh, S.)

  Ede, Rt. Hon. J. C.

  Beveridge, Sir W. H.

  Charleton, H. C.

  Edmondson, Major Sir J.

  Bevin, Rt. Hon. E. (Wandsworth, C.)

  Chater, D.

  Edwards, Rt. Hon. Sir C. (Bedwellty)

  Bird, Sir R. B.

  Christie, J. A.

  Edwards, Walter J. (Whitechapel)

  Blair, Sir R.

  Churchill, Rt. Hn. Winston S. (Ep'ing)

  Elliot, Lt.-Col. Rt. Hon. W. E.

  Boles, Lt.-Col. D. C.

  Clarke, Colonel R. S.

  Ellis, Sir G.

  Boothby, R. J. G.

  Clarry, Sir Reginald

  Elliston, Captain Sir G. S.

  Bossom A. C.

  Cluse, W. S.

  Emrys-Evens, P. V.

  Bower, Norman (Harrow)

  Cocks, F. S.

  Entwistle, Sir C. F.

  Bowlas, F. G.

  Colegate, W. A.

  Errington, Squadron-Leader E.

  Evans, Col. Sir A. (Cardiff, S.)

  Lancaster, Lieut.-Col. C. G.

  Robinson, W. A. (St. Helens)

  Fermoy, Lord

  Law, Rt. Hon. R. K.

  Rowlands, G.

  Fildes, Sir H.

  Lawson, H. M. (Skipton)

  Russell, Sir A. (Tynemouth)

  Findlay, Sir E.

  Lawson, J. J. (Chester-le-Street)

  Salt, E. W.

  Fleming, Squadron-Leader E. L.

  Lennox-Boyd, A. T. L.

  Sanderson, Sir F. B.

  Foster, W.

  Leslie, J. R.

  Sandys, E. D.

  Frankel, D.

  Liddall, W. S.

  Shephard, S.

  Fraser, Lt.-Col. Sir Ian (Lonsdale)

  Lindsay, K. M.

  Shepperson, Sir E. W.

  Fraser, T. (Hamilton)

  Linstead, H. N.

  Shinwell, E.

  Fyfe, Major Sir D. P. M.

  Lipson, D. L.

  Silkin, L.

  Gates, Major E. E.

  Lloyd, Rt. Hon. G. W. (Ladywood)

  Sinclair, Rt. Hon. Sir A.

  George, Megan Lloyd (Anglesey)

  Loftus, P. C.

  Sloan, A.

  Gibbins, J

  Longhurst, Captain H. C.

  Smith, Bracewell (Dulwich)

  Gibbons, Lt.-Col. W. E.

  Mebane, Rt. Hon. W.

  Smith, E. (Stoke).

  Gibson, Sir C. G.

  MacAndrew, Colonel Sir C. G.

  Smith, E. P. (Ashford)

  Glanville, J. E.

  McCallum, Major D.

  Smith, T. (Normanton)

  Gledhill, G

  McCorquodale, Malcolm S.

  Somervell, Rt. Hon. Sir D. B.

  Glyn, Sir R. G. C.

  McEntee, V. La T.

  Sorensen, R. W.

  Granville, E. L.

  McEwen, Capt. J. H. F.

  Stanley, Col. Rt. Hon. Oliver

  Green, W. H. (Deptford)

  McGhee, H. G.

  Stephen, C.

  Greenwell, Col. T. G.

  McGovern, J.

  Stewart, W. Joseph (H'gton-le-Spring)

  Greenwood, Rt. Hon. A.

  Mack, J. D.

  Storey, S.

  Grenfell, D. R.

  McKie, J. H.

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

  Griffiths, G. A. (Hemsworth)

  McKinlay, A. S.

  Strauss, H. G. (Norwich)

  Griffiths, J. (Llanelly)

  MacLaren, A.

  Strickland, Capt. W. F.

  Grigg, Sir E. W. M. (Altrincham)

  Maclean, N. (Govan)

  Stuart, Lord C. Crichton (Northwich)

  Grigg, Rt. Hon. Sir P. J. (Cardiff, E.)

  Magnay, T.

  Stuart, Rt. Hon. J. (Moray & Nairn)

  Grimston, R. V. (Westbury)

  Mainwaring, W. H.

  Suirdale, Colonel Viscount

  Groves, T. E.

  Mander, G. le M.

  Summerskill, Dr. Edith

  Gruffydd, Professor W. J.

  Manning, C. A. G.

  Sutcliffe, H.

  Guinness, Group Capt. T. L. E. B.

  Marlowe, Lt.-Col. A.

  Sykes, Maj.-Gen. Rt. Hon. Sir F. H.

  Gunston, Major Sir D. W.

  Mathers, G.

  Tate, Mrs. Mavis C.

  Guy, W. H.

  Mayhew, Lt.-Col. J.

  Taylor, H. B. (Mansfield)

  Hammersley, S. S.

  Messer, F.

  Teeling, Flight-Lieut. W.

  Hannon, Sir P. J. H.

  Mitchell, Colonel H. P.

  Thomas, I. (Keighley)

  Hardie, Mrs. Agnes

  Mitcheson, Sir G. G.

  Thomas, J. P. L. (Hereford)

  Harris, Rt. Hon. Sir P. A.

  Malson, A. H. E.

  Thorne, W.

  Harvey, T. E.

  Morgan, R. H. (Stourbridge)

  Thorneycroft, Major G. E. P. (Stafford)

  Henderson, J. (Ardwick)

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

  Thorneycroft, H. (Clayton)

  Henderson, J. J. Craik (Leeds, N.E.)

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

  Thurtle E.

  Hepburn, Major P. G. T. Buchan-

  Mort, D. L.

  Tinker, J. J.

  Hepworth, J.

  Muff, G.

  Tomlinson, G.

  Hewlett, T. H.

  Murray, Sir D. K. (Midlothian, N.)

  Tree, A. R. L. F.

  Higgs, W. F.

  Murray, J. D. (Spennymoor)

  Tufnell, Lieut.-Comdr. R. L.

  Hinchingbrooke, Viscount

  Naylor, T. E.

  Turton, R. H.

  Hogg, Hon. Q. McG.

  Neal, H.

  Viant, S. P.

  Holdsworth, Sir H.

  Nicholson, G. (Farnham)

  Walkden, A. G. (Bristol, S.)

  Holmes, J. S.

  Nicolson, Hon. H. G. (Leicester, W.)

  Walkden, E. (Doncaster)

  Horabin, T. L.

  Oldfield, W. H.

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

  Hubbard, T. F.

  Oliver, G. H.

  Ward, Irene M. B. (Wallsend)

  Hudson, Sir A. (Hackney, N.)

  O'Neill, Rt. Hon. Sir H.

  Wardlaw-Milne, Sir J. S.

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

  Orr-Ewing, I. L.

  Waterhouse, Captain Rt. Hon. C.

  Hughes, R. Moelwyn

  Parker, J.

  Watson, W. McL.

  Hume, Sir G. H.

  Peat, C. U.

  Watt, F. C. (Edinburgh Cen.)

  Hutchison, Lt.-Com. G. I. C. (E'burgh)

  Peters, Dr. S. J.

  Watt, Brig. G. S. Harvie (Richmond)

  Hynd, J. B.

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

  Westwood, Rt. Hon. J.

  Isaacs, G. A.

  Pilkington, Captain R. A.

  While, C. F. (Derbyshire, W.)

  James, Admiral Sir W. (Ports'th, N.)

  Plugge, Capt. L. F.

  White, Sir Dymoke (Fareham)

  Jenkins, A. (Pontypool)

  Ponsonby, Col. C. E.

  White, H. (Derby, N.E.)

  Jenkins, Sir W. (Neath)

  Poole, Captain C. C.

  White, H. Graham (Birkenhead, E.)

  Jennings, R.

  Pownall, Lt.-Col. Sir Assheton

  Whiteley, Rt. Hon. W. (Blaydon)

  Jewson, P. W.

  Prescott, Capt. W. R. S.

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

  John, W.

  Price, M. P.

  Williams, Rt. Hon. T. (Don Valley)

  Johnston, Rt. Hon. T. (Stl'g & C'km'n)

  Pritt, D. N.

  Willink, Rt. Hon. H. U.

  Jones, A. C. (Shipley)

  Procter, Major H. A.

  Wilmot, John

  Jones, Sir G. W. H. (S'k Newington)

  Quibell, D. J. K.

  Windsor, W.

  Jowitt, Rt. Hon. Sir W. A.

  Rankin, Sir R.

  Winterton, Rt. Hon. Earl

  Keatinge, Major E. M.

  Rathbone, Eleanor

  Womersley, Rt. Hon. Sir W.

  Keir, Mrs. Cazalet

  Reakes, G. L. (Wallasey)

  Woodburn, A.

  Kendall, W. D.

  Reed, Sir H. S. (Aylesbury)

  Woolley, Major W. E.

  Kerr, H. W. (Oldham)

  Reid, Rt. Hon. J. S. C. (Hillhead)

  Wootton-Davies, J. H.

  Kerr, Sir John Graham (Scottish U's.)

  Reid, W. Allan (Derby)

  Wright, Group Capt. J. (Erdington)

  Key, C. W.

  Riley, B.

  York, Major C.

  King-Hall, Commander W. S. R.

  Ritson, J.

  Kirby, B, V.

  Roberts, W.

  TELLERS FOR THE NOES:—

  Kirkwood, D.

  Rebertson, D. (Streatham)

  Major A. S. L. Young and

  Lamb, Sir J. Q.

  Robertson, Rt. Hn. Sir M. A. (M'ham)

  Mr. Pym.

  Bill read the Third time, and passed.

  The Chairman: The next Amendment I propose to call is that in the name of the hon. Member for Peckham (Mr. Silkin). Perhaps the Amendment in the name of the hon. Member for Daventry
  274
  (Mr. Manningham-Buller) can be taken at the same time, namely, in line 24, at end, insert:
  "Provided that the value of an interest in land purchased pursuant to a notice to treat

  275
  served as aforesaid shall if the interest in land has been purchased since the thirty-first day of March, nineteen hundred and thirty-nine, by the person upon whom the notice to treat has been served at a price lower than the price ascertained as aforesaid be deemed to be the price at which the interest was purchased from the person served with notice to treat unless the purchasing authority or the arbitrator is satisfied by such person that the interest was purchased by that person in connection with the occupation or use of land by himself or a member of his family or a person employed by him or as an investment and not with a view to resale at a higher price."
  Mr. Silkin: I beg to move, in line 24, at end, insert:
  "Provided that it shall be a direction to the arbitrator that he shall ascertain whether the person claiming compensation in respect of any interest purchased that interest as at a date later than the thirty-first day of March, nineteen hundred and thirty-nine, and if he did so, whether the price then paid for that interest was lower than the value of that interest as ascertained in accordance with Rules 2 to 4 of the Rules set out in the said Section two by reference to prices current at the said thirty-first day of March, and, if the price was lower than as aforesaid, the arbitrator in assessing the compensation to be paid in respect of that interest shall not award any sum greater than the price so paid unless that person proves to the satisfaction of the arbitrator that the interest was purchased by that person in connection with the occupation or use of land by himself or a member of his family or a person employed by him."
  I believe that this Amendment will be less controversial than the one we have been discussing. Indeed, I venture to believe that its object will be accepted with unanimity. It is designed to deal with the speculator, the person who bought property during the war, and whose property is to be acquired by the local authority. This question has been the subject of a great deal of discussion during the earlier Committee stage, on Second Reading, and to a certain extent even to-day, and I need not embark on the iniquities of the speculator. I would like, however, to give two examples of the kind of person whom this Amendment is designed to catch. There is, first, the person who in 1940 and 1941, and in some cases even later, went round the blitzed areas and induced, persuaded, even frightened, people into selling their property at a price far below its real value. It is known that this has been carried out on a very large scale in certain parts of the country. It is within my knowledge that this has been done on a large scale in Margate, Ramsgate, Dover
  276
  and Folkestone. An hon. Friend of mine says that it has been done in other places. It is inconceivable that such a person, when his property is being acquired, should be paid anything but the price which he paid for the property, and certainly not the 1939 value.
  5.0 p.m.
  I know a case in London of a lady who owned a property which, in 1939, was worth £40,000. In the course of the blitz and towards the end of 1940, she was persuaded into selling her interest for £18,000. In due course the property was acquired by the local authority for £28,000, and the speculator thus made a profit of £10,000. If the local authority desired to acquire that property after the passing of this Measure, they would have to pay £40,000, and the speculator would walk off with a profit of £22,000. Nobody can have any sympathy for the person who bought the property for £18,000. That is the kind of case that my Amendment is designed to meet, and the way in which it would deal with it is to require everybody who bought, after 31st March, 1939, property it is proposed to acquire, to prove to the satisfaction of the arbitrator that the property was bought for his own occupation and use. I consider it fair and just that a person who bought a property for his own occupation and use should not be treated as a speculator and should be entitled to receive the 1939 value. Where a person bought a property not for his own use but for resale or as an investment, I see no hardship to that person in merely paying him the price that he paid for the property.
  There are two other Amendments on the paper designed to achieve the same, or a similar, result. The first is that in the name of the hon. Member for Daventry (Mr. Manningham-Buller). I believe that that Amendment goes too far. It brings in, as an exception, the investor. The hon. Member would treat the investor as a person who, however cheaply he may have bought his property during the war, should be entitled to the full 1939 value. The result would be, had the Amendment of the right hon. Member for Devonport (Mr. Hore-Belisha) been carried, that the particular person I had in mind, who bought the property for £18,000, might have been able to estab-

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  lish as a fact that he was an investor. It is very difficult to draw the line between the investor and the speculator, because the same person appears under disguises. The speculator I had in mind would be able to sell the property for £40,000. Surely my hon. Friend would not wish that sort of thing to take place.
  Then there is an Amendment in the name of the hon. and learned Member for Ilford (Mr. G. Hutchinson), which proposes to give the arbitrator no direction at all. The hon. Member merely asks the arbitrator to consider the amount of compensation, having regard to the time at which the purchase was made. I feel that that is far too vague. It is putting too much at the discretion of the arbitrator without giving him any real guidance as to what he is to do. Suppose the arbitrator does have regard to the time at which a property was purchased, what is he to do about it? In what way is he to have regard to that fact? The Amendment does not give him a clue to the kind of compensation that, in a proper case, he should pay to the person who bought the property at that time, and whether he is to pay him no more than the price than the person paid for it. Both the Amendments are honestly designed to rope in the speculator, but they are not entirely satisfactory.
  On the other hand, I believe that the Amendment which I have moved is satisfactory, because it gives the arbitrator a criterion to which he can act. It draws his attention to the points which he has to consider, and if a particular person fails to satisfy him that he bought his property for his own use or for the use of his family, the arbitrator can deal with him as a speculator and give him no more than the price which he paid for the property. That is not an unjust way of dealing with the matter. We should all like to have an assurance of getting back what we paid for a particular article or piece of property. So long as the person concerned is a speculator in land, I cannot feel that he has anything to complain of. I hope that the Minister will see his way to accepting the Amendment. There may be some verbal imperfections in it. None of us can claim to be perfect, and I do not claim to possess the skill of a Parliamentary draftsman. The Minister may consider that some variation in wording is necessary or desirable, and of course, I will gladly accept it. I hope
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  that he will be able to accept the spirit of the Amendment and the particular criterion which it proposes to apply, in deciding whether a person is to receive the 1939 value or the price which he actually paid for the property.
  Mr. Manningham-Buller: After our recent discussion, it is pleasant to be able to pursue a common object, even though we may differ as to the right method of achieving it. I found myself in complete agreement with the preliminary observations of the hon. Member for Peckham (Mr. Silkin). I can see no reason at all why a speculator who bought his land since 1939, at a price lower than 1939 prices, if he has not already secured his profit, should be able to make profit out of the local authorities and the ratepayers. I do not believe there is any means, apart from the representatives of the Chancellor of the Exchequer, of dealing with the speculator who bought and resold before the public authority took the property over, but there is a method of dealing with the man who is holding on, and who bought at lower than the 1939 price. He is holding out, and he will be paid by the local authorities on the 1939 value, plus it may be 30 per cent., if he has gone into occupation himself.
  The great merit of the hon. Member's Amendment and those of myself and my hon. Friends is that we do not seek to define the elephant. We ask the elephant to come forward and make itself known. My Amendment puts the matter a little more cogently than the Amendment of the hon. Member for Peckham. The burden is laid on the person from whom the property is acquired, if he bought the property since 1939 and at less than the 1939 price, to establish to the satisfaction of the purchasing authority, or if it goes to the arbitrator to the satisfaction of the arbitrator, that he bought the propery for his own occupation or use, or for a member of his family, or that he bought it as an investment. These are the words:
  "… or as an investment and not with a view to resale at a higher price."
  So that the burden will be on the man who has bought since 1939 for lower than the 1939 price, and unless he discharges that burden, if he leaves the matter in doubt, all he will have paid to him as

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  the purchase price of his property will be the same as he paid for it.
  I do not think it will be at all easy in a great many cases to prove that property has been bought as an investment and not for re-sale. This is not a case of giving an investor 30 per cent. more than the 1939 price, it is merely saying that if a man has bought for a genuine investment, to hold on to the property for the return it is to bring him, he should not be regarded in the same category as a speculator. I think the line can be drawn between the two. The hon. Member for Peckham apparently does not think that can be done. Therefore, we differ again.
  I am in agreement with the hon. Member's observations on the Amendment in the name of the hon. and learned Member for Ilford (Mr. G. Hutchinson), which in my view is so vague as to be useless for any purpose at all. Whether the hon. Member's Amendment or mine is the better of the two, is immaterial. We are both pursuing the same objective. If our method is not right, I hope the Government will seek to devise some way in which this object can be achieved. [HON. MEMBERS: "Hear, hear."] I am very glad to hear that encouraging comment from my hon. Friend the Member for The High Peak (Mr. Molson), because from that it would appear that at last he has realised that the observations which appeared under his name in the "Evening Standard" last night, to the effect that the Tory Reform Committee were satisfied with this Clause, are inaccurate.
  Mr. Wilmot: I hope the Minister will appreciate the difference between the Amendment to which the hon. Member for Daventry (Mr. Manningham-Buller) has just spoken, and that moved by my hon. Friend the Member for Peckham (Mr. Silkin). It seems to me that the distinction which the hon. Member for Daventry seeks to draw between the investor who buys to hold, and the investor who buys to sell, is a very difficult one in practice. I invite the attention of the hon. Member for Daventry to this point, that if the wording of his Amendment were adopted, it would be very easy for anyone who intended to sell to show that he bought as an investor. The thing could be extended so widely that the object which he has in view and which we have in view, would, very largely, be evaded.
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  The great advantage of the Amendment moved by my hon. Friend the Member for Peckham, is that it draws the line at a place where it can firmly be drawn between a purchase for occupation and a purchase for other than occupation, namely investment. I sincerely hope that the Minister who, I have little doubt, will have sympathy with the object of this Amendment, will indicate his assent and support. I hope he will say that the line has to be drawn at that point, and not seek to define what is investment and what is speculation in the terms of the other Amendment which, in my view, would not work.
  5.15 p.m.
  Mr. Erskine-Hill: I hope the Government may be able to do something to give effect to what I believe to be the general wishes of this Committee. I support the Amendment which has been put down in the name of my hon. Friend the Member for Daventry (Mr. Manningham-Buller). I think it is a better Amendment, but I do not say that either that, or the Amendment in the name of the hon. Member for Peckham (Mr. Silkin), is necessarily the last word. I do think, however, that the Government, in view of the general expression of opinion throughout the Committee, should be able to propose an Amendment which will have the effect we all desire. I think it is quite possible. My right hon. and learned Friend the Attorney-General may, of course, say that it is extraordinarily difficult to define a speculator. Of course it is. It would be almost impossible to do it, but if either the Amendment in the name of the hon. Member for Peckham, or that in the name of the hon. Member for Daventry, is adopted we get over all the difficulties of definition, because then the onus is put on a particular person to show that the transfer was a bona fide transfer. I do not want to add more because I think the Committee' is in such general agreement that the Government will find some solution to enable us to get what we want.
  Mr. G. Hutchinson: It is evident that there is unanimity on this topic on both sides of the Committee. Therefore, I propose to address myself solely to the debatable question of which of the various ways proposed in the different Amendments on the Paper, will prove to be the most efficacious means of dealing with what is generally agreed to be a great evil. My

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  hon. Friend the Member for Peckham (Mr. Silkin) made reference to the Amendment which stands on the Paper in my name, and I understood him to say he was unable to appreciate what the arbitrator was expected to do if he was to have regard, as my Amendment suggests, to transactions subsequent to 1939. The answer to that is, I think, very simple. The right solution of this problem is, I believe, to get the arbitrator away from the 1939 standard. As the Clause stands the arbitrator is bound to start with the 1939 standard. I believe, if I may put it in this way, that if he is released from this obligation and given liberty to adopt some other standard than the 1939 standard, that really is as far as it is necessary or practicable to go in providing a solution to this problem.
  One of the difficulties about this Bill is that it has become so complicated. The Bill really attempts to provide for too much. So far as this particular Amendment is concerned, I feel sure the Committee would be well advised to give the official arbitrator, when he comes to determine the amount of compensation, as wide a discretion as we can in undertaking his task. Is there any reason why we should not trust the official arbitrator to do justice in this matter, and to ascertain who is the speculator, and deal with him accordingly? The official arbitrators are very experienced persons, who by training and experience are well-qualified to do that, provided we give them a sufficiently free hand. I am sure that the most practical way in which the Committee can deal with this matter is to take the course of not endeavouring to prescribe to the arbitrator what he shall or shall not award, but to give him, within certain broad limits, as wide a discretion as we reasonably can. If that is done, I think the Committee need have no doubt that the official arbitrators will be well able to differentiate between the speculator and the person who is not a speculator, and to deal with the speculator in the manner that the Committee would desire.
  Mr. Lewis: It seems to me that the hon. Member for Peckham (Mr. Silkin) and the hon. Member for Daventry (Mr. Manningham-Buller) have both spoiled their Amendments by the qualifications that they have put into them. I am one of those who voted against the Government just now, because I consider
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  that the provision made for compensation of persons who owned their property at the beginning of the war, and whom it is proposed to dispossess under this Bill, is inadequate. But I have never taken the view that we should do anything to make it easier for people to make money out of the war by speculating in property. I do not go so far even as the hon. Member for Peckham. In my view, if anyone has purchased property since the outbreak of war, and that property is now required by a public authority, under this Bill, the price paid by the authority should be either the 1939 value, or the price that the present holder paid for the property, whichever be the lower. I would not qualify that in any way: I would not accept either the qualifications suggested by the hon. Member for Peckham, or the qualifications suggested by the hon. Member for Daventry. If the Government propose to do something to meet this problem, they should make a hard-and-fast rule that, where property has been bought since the outbreak of war, the purchaser shall not be entitled to more than either the price he paid for the property or the 1939 value, whichever be the lower.
  Mr. Silkin: I do not want my hon. Friend to labour that point, because that would be the effect of either of these Amendments.
  Mr. Lewis: The hon. Member for Peckham says, in his Amendment:
  "unless that person proves to the satisfaction of the arbitrator that the interest was purchased by that person in connection with the occupation or use of land by himself or a member of his family or a person employed by him."
  I object to that exception. The hon. Member for Daventry, has other exceptions, and I object to them. I object to all exceptions.
  Mr. Wilmot: Would the hon. Member object to the qualifications if the person were, in fact, in occupation, and after his property had been acquired he had to find somewhere else to live?
  Mr. Lewis: Yes; I see no reason why a person who has purchased property during the war should make a profit out of that property, if the property is required by the local authority, under this Bill.
  Mr. MacLaren: I congratulate hon. Members opposite on a conversion. In

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  all the years I have been fighting this land question on the Floor of the House, this is the first occasion on which Members of the Conservative Party have suddenly been stricken with conscience, and have begun to admit that there is such a thing as a speculator in land values, and that he ought to be extinguished. I do not think that the Amendment of my hon. Friend the Member for Peckham (Mr. Silkin) will do that. I say to him and to the Labour Party that once you assent to land purchase, all these difficulties are inevitable. But that is in passing. I think that the suggestion of my hon. Friend the Member for Colchester (Mr. Lewis) is about the best I have heard so far, and that land should be taken at the price the owner paid for it, or at the 1939 valuation—which is, in my opinion, a fiction; but never mind that—whichever is the lower. The two Amendments imply two things on the part of the arbitrator. He must find out the intention of the person who has bought the land. The arbitrator has enough to do under this Bill without giving him this duty of applying psychoanalysis to every purchaser. I would not like to have to find out the intention of any person who buys land. I agree with the Amendment moved by the hon. Member for Daventry (Mr. Manningham-Buller) but if you say that an arbitrator has to satisfy himself that the person who has bought the land has not done so with a view to resale at a higher price, there must, inevitably, be an element of time involved. How long would you give the new owner to establish that he was buying the land not for resale? How many years would he have to hold it to establish that fact? It is very difficult indeed.
  My main purpose is to ask the legal elements in the Government to do something in this matter, because if there is any skunk that ought to be stamped out of the State, it is this type of speculator. I notice that many of them carrying on this practice in London are not even British. That ought to be noted. I wonder what the men at the front would say if they knew that they are fighting to defend a country which has become the playground of foreign speculators in London. I have had to sit quiet and swallow a good deal on this Bill, but here is a vital point. I hope we shall be able to devise some Clause that will deal with
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  the gentlemen who are running around even now, speculating in the land of London. I hope that the Committee will take note of what is going on at present.
  Sir Herbert Williams: Will the hon. Member tell us where all this is happening; because I do not know these gentlemen?
  Mr. MacLaren: The hon. Member ought to read the papers, and he would see.
  Sir H. Williams: What papers?
  Mr. MacLaren: Last night's "Evening Standard" or last night's "Evening News." Notice is being taken there of people who are beginning to lay their hands on land around the West End of London, in order to use it as sites for offices which used to be in the middle of London.
  Sir H. Williams: The hon. Member was talking about people who are doing something wrong. Will he say where they are?
  Mr. MacLaren: I would rather leave that to the ferreting mind of my hon. Friend.
  Sir H. Williams: But the hon. Member knows them.
  Mr. MacLaren: I will take my hon. Friend by the hand and show him. All I am saying is that I hope the Government will, by some Clause or another in this Bill, net these gentlemen in some way; because there is this difficulty. People like myself, who have very strong views in the matter, know that when a man wants to use a piece of land, he has no alternative, under the present economic system, but to buy it. We are not civilised yet: we believe in buying and selling land. We can appreciate, therefore, the distinction between the land-user, and that other kind of gentleman who seeks, not to use the land at all, but merely keeps his emissaries running around to find out where the sites are likely to rise in value; and then enters in, as he is doing, buys up the tail-ends of old leases, and pulls down the buildings, in order to speculate on the value of the site. We know that that is going on, not merely in London, but all over the country. I again congratulate my hon. Friends opposite, although I do not congratulate the hon. Member for South

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  Croydon (Sir H. Williams), because I do not know that I shall ever convert him. I do, however, hope the Government will find some way of doing something to deal with these ramifications which are going on in land speculation.
  5.30 p.m.
  The Attorney-General (Sir Donald Somervell): Perhaps it might be convenient if I said a few words at this point in the discussion. My hon. Friend the Member for Colchester (Mr. Lewis) made an appeal to the Government to do something in this matter. I want to remind the Committee, because I think it is very relevant, that when this question of the possibility of profit being made out of land originally arose, what people had in mind was the very large profit that might be made if we went above the 1939 level and the planning authorities, or the local authorities, had to buy land irrespective of any ceiling or standard. That was the problem that people had in mind, the speculative profit problem, and by adopting, as this Clause does, the 1939 standard, the Government is, in fact, adopting the measure which was pressed upon them to prevent speculative profits. I think it very important that that should be borne in mind in considering this problem.
  The point now put forward, and I am in general sympathy with the attitude taken, is that there is a subsidiary possibility of speculative profits below the 1939 level.
  Mr. Silkin: My right hon. and learned Friend will bear in mind that, when it was originally discussed, the 1939 prices were to be a ceiling. Well, the ceiling has gone, but the speculator remains.
  The Attorney-General: I would not say that the ceiling has gone. I appreciate my hon. Friend's point, and I think he appreciates mine—that what people had originally in mind was the possibility of the figures going well above 1939, whether it was a floor, ceiling or standard, and, to that extent, this Bill meets that point. Now the point is the possibility of profits made by those who buy below the 1939 level but who, under the Bill, get the 1939 standard. This is a problem which my right hon. Friend and I and others of our colleagues have considered carefully. It is a problem which raises, I think, greater practical difficulties than, maybe, some of my hon.
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  Friends realise. I would illustrate it with one or two instances. We have some evidence of it in the three different Amendments which are down on the Order Paper.
  Undoubtedly the Amendment in the name of the hon. Member for Daventry (Mr. Manningham-Buller) is one which has the support of some other hon. Members. He wishes to cut out the investor, but it is going to be very difficult to say who is an investor and who is not. It is not a crime to put money into land, or anything else, at the value at which it is being offered in the market, and that would be a very difficult criterion to apply. One cannot say to a man, "Did you consider any possibility of re-sale?" If he is honest he says, "Of course I did." If he is reasonably honest he would say, "I cannot reasonably say that, but, of course, if I get a reasonably good offer, I am not going to put my hand on my heart and say I should not sell." "Speculator," it would be said.
  A man may have bought, not to resell, but to develop. He may have bought a property, damaged or not, with a view to putting a lot of money into it, which may have turned out well or may have turned out badly. There is a great deal of development, to which we have owed a lot in the past, which has been done by private individuals who bought property which had outworn its usefulness and put up blocks of flats, and it is a perfectly legitimate way of spending earnings. How are we to deal with a person like that? He says, "This lot was on offer and I bought it to put a lot of money into." Is he a speculator or not? I am not quite sure.
  Coming to rather less important but more technical matters I want the Committee to realise that we have considered this problem and that we felt that, if we are to deal with it, we should want a rather elaborate code. I will deal with the point of the hon. and learned Member for Ilford (Mr. Hutchinson)—that we could just chuck it all at the arbitrator. Arbitrators do not like having things chucked at them in that way. They are there to apply a code, and to tell them to have regard to all the circumstances which might arise in every conceivable sort of position is not a fair way of dealing with them. The code would have to cover those cases where an alleged speculator bought property which had been acquired

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  with other property. If all the cases were simple cases, in which it could be said "In 1941 the actual property acquired was bought by AB for so much and here is the 1939 standard," it might be fairly simple. But we should have to provide for the case of a man buying other blocks of property, and to have some procedure for apportioning the price paid to the price he is to receive. A man may have sold part of the property which he did not require. There would have to be a complicated code to arrive at how much of the original purchase price should be allocated to the property being acquired.
  Take another problem. In some of these cases, property has been bought below the 1939 cost in areas which are at present, in a sense, unproductive for an uncertain period. Somebody, say, at Ramsgate or Margate may want to sell his property and realise, having decided never to go back there. Somebody buys it and the price paid would obviously be reflecting the fact that for an uncertain future period he could not use that property, say, as a lodging-house, boarding-house or hotel, in the ordinary way. It would be quite wrong to treat what the man gave for that sort of property in 1941 as if he had been buying property, which, at that moment, had been at its full commercial value, and say we would not give him any more. He would say that we could not disregard the fact that he bought it knowing that he could not make anything out of it for five years, and that, in fact, he had made nothing out of it for five years, and therefore it would be wrong to give a price which would reflect the unproductive nature of the property for the period of five years.
  There might be a man who bought property and created leasehold interests out of it. The code would have to reflect that, because a man may have bought a leasehold interest which has now less time to run than when he bought it. If he bought the reversion, it has become more valuable since he bought it because the lease is nearer falling in. There might be cases where, possibly with a view to something of this kind, a man has transferred it to an investment company, which appears to have given a larger sum than was originally paid for it. To get at all the people it might be desirable to get at would need a rather elabor
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  ate code, something like the tax evasion code. There is the speculator who before the notice to treat has sold the property and got away. We do not catch him nor do we catch—and this must always be realised—the speculator who is not in an acquired area. My hon. and learned Friend the Member for Ilford (Mr. Hutchinson) said, "Have a general Clause," some general form of words to guide the arbitrator. The complexities, some of which I have indicated, will satisfy they Committee that it is really not fair to the official arbitrator to chuck a problem like this at him. The Committee must observe the problem and give the arbitrator some guide as to how to deal with it.
  I will tell the Committee frankly the Government's decision, and our decision on the matter. We first of all felt that by taking 1939, even as a standard, we would prevent the grosser manifestations of the evil which we all desire to prevent. Our evidence was that the amount of speculation below 1939 was not great. We do not suggest that it has not happened in certain cases. We felt the great difficulty of producing a satisfactory code, the great complexity which it would involve and the amount of time that would have to be taken by arbitrators in administering it. We can say that the magnitude of the speculative evil below 1939 standard did not justify the complexity and the administrative work which a satisfactory solution of the problem involved. That is the decision to which we came. I cannot hold out any hope—and it would be wrong to do so—on behalf of my right hon. and learned Friend, that, at a later date, we shall be able to get over the practical difficulties, but my right hon. and learned Friend having heard from all sides of the Committee a desire that he should look at the problem, we will as is right and proper, have another look at it. We might be able to assimilate it in some way—without possibly covering all the details with a complete code—so as to come down in bad cases, which we would all like to meet. If we can, we will suggest something in another place. We had a look at it, taking a long time over it and we felt that the complexity was great and that the magnitude of the evil did not justify a very full code, but my right hon. and learned Friend will have another look

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  at it and I hope, in view of that assurance, the hon. Member will withdraw the Amendment.
  5.45 p.m.
  Sir H. Williams: I imagine that any Amendment of the kind the learned Attorney-General suggests would impose a charge and, therefore, might be inserted.
  The Attorney-General: May I make it clear? The only thing we would consider would be a procedure by which something less was given in cases where the purchase is at the lower level.
  Mr. Moelwyn Hughes: We are asking for something which will give a little more.
  Sir H. Williams: I was interested in the right hon. and learned Gentleman's speech, because he described a type of person who did not seek to make a purchase but who had something he wanted to sell at a lower price than the 1939 price, whether it be property or land, and he went on to indicate that such a person really ought to be compensated a little for lack of income from the property during the period when he held it and it was productive of nothing.
  The Attorney-General: I did not say that. What I was saying was, not that he should be compensated, but that the price he paid would be less than it would have been if the land had been productive, and that ought to be taken into consideration.
  Sir H. Williams: The speech had no significance at all unless the right hon. and learned Gentleman implied that here was a case where something more ought to be given than would otherwise be the case. Take the case of building development. There happens to be in my part of the world one of the largest and most competent building firms in the South of England. If they are to carry on the business of building houses and providing homes for the people, they have always to be searching for sites. This Amendment has a bearing not only upon land already built upon but upon sites. Has it become a wrong thing for a builder to buy sites in anticipation, and, if he is wise, to buy economically? Surely, that has not become a criminal thing. The disciple of Henry George talked about speculators, but in that case you speculate as much as you like and in comes
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  the Revenue authority and levies a charge on the capital value of the land.
  The Deputy-Chairman: We must leave this point.
  Sir H. Williams: I really want to know where we stand on the matter. With the constant declaration that it has now become an anti-social thing to do the normal things which are necessary before houses can be built we shall, if we are not careful, paralyse post-war house building.
  Mr. Molson: The hon. Member for South Croydon (Sir H. Williams) has been the first person to express a desire that the Government should not succeed in finding a form of words which would enable the speculator to be dealt with. I hope that the Government will note that from all parts of the Committee, except from that one quarter—
  Sir H. Williams: My hon. Friend must not misinterpret me. I gave examples of people who will be penalised and to whom the word "speculator" does not apply at all. Insult is not a valuable form of argument.
  Mr. Molson: I am glad to ascertain from every part of the Committee, that the Government are now believed to be trying to devise a form of words which will deal with this particular problem. It should not, ordinarily, be too difficult to detect a gross case when it arises, I did not hear the whole of the speech of the Attorney-General, but I am satisfied that it is going to be extremely difficult for the Government to devise any satisfactory form of words. I hope they will make an earnest effort in this matter, and I would like to suggest that if it so difficult—and I agree that it is difficult—to define the kind of person whom we desire to catch, the best solution would be to leave, as the hon. and learned Member for Ilford (Mr. Hutchinson) has suggested, an extremely wide discretion to the official arbitrator.
  Mr. Wilmot: We listened with very great attention to the Attorney-General, and we were impressed by the difficulties of the task which he has undertaken to try to perform, but I want to impress upon him that there is a widespread feeling everywhere that it would be improper that the cost of rebuilding our blitzed cities should be made the more onerous in order that people may make

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  profit out of deals in property. That, simply put, is I think the feeling of nearly everybody, that it would be an outrageous thing if this kind of profit could be made.
  I listened with very great interest to the Attorney-General's recital of the difficulties, and I am bound to say that they were not quite so immense as I had expected him to reveal. First, there is a very definite limit to the whole problem. Only those transactions which have occurred since 1939 will be looked at at all. Although there has been speculation, there has not been a very active property market, taking the country as a whole, and therefore it is a limited problem. Now let us look at just one other aspect. These compensations will be payable in respect of land—uncovered land as well as buildings—and although the shortage of building materials and labour, and the immense pent-up demand for houses and premises will undoubtedly have an upward pressure on the cost and value of buildings, it is not at all clear that the price of uncovered land will continue to rise. I have been advised by some people who know about these things that the various difficulties of developing land in the post-war circumstances may well have a depressing effect upon the price of land, and therefore, in adopting the 1939 value not as a ceiling but as a standard, the Government are very likely, in the case of uncovered land, to raise the value in many cases to levels which they would not otherwise have attained. In those circumstances it is most important that those who have recently acquired properties at knock-out prices should not, at the public expense, be enabled to make a profit which they would not otherwise make if the property were not acquired and they had to dispose of it in the open market. So I urge the right hon. and learned Gentleman most earnestly to try to find a way of meeting the unanimous wish of the Committee and the very powerful feeling in the country that speculation in properties shall not be made at the public expense.
  Mr. Silkin: I have listened with very great interest to the remarks of my right hon. and learned Friend and, of course, it is impossible not to have been impressed to a certain extent by what he said. I want to say that public sentiment about
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  the speculator is very strong indeed, far stronger, possibly, than the case might justify, and the Government really ought to do something in the matter merely to satisfy public opinion, if nothing else. I felt that a good many of the cases referred to could have been met, perhaps, by allowing interest on the purchase price. I think there might be a case for allowing a certain amount of interest, especially where a person has bought land for the purpose of subsequent development, but has not been able to use it for the time being. It might be fair to increase the actual purchase price in such cases by a certain amount of interest, but I hope that the Government will look at this seriously and make a genuine attempt to do something. In that belief and, I hope, assurance, I shall be quite pleased to ask leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Mr. Manningham-Buller: I beg to move, in line 24, at end, insert:
  "Provided that the value of an interest in land purchased pursuant to a notice to treat served as aforesaid shall if the interest in land has been purchased since the thirty-first day of March, nineteen hundred and thirty-nine, by the person upon whom the notice to treat has been served at a price lower than the price ascertained as aforesaid be deemed to be the price at which the interest was purchased from the person served with notice to treat unless the purchasing authority or the arbitrator is satisfied by such person that the interest was purchased by that person in connection with the occupation or use of land by himself or a member of his family of a person employed by him or as an investment and not with a view to resale at a higher price."
  This Amendment has been considered at the same time as the previous Amendment, and I would like to say that the feeling of the whole Committee has been such as to encourage the members of the Government to see if there is any further avenue they can explore. I was a little depressed to hear that, despite the legal weight on the Front Bench, up to the moment the matter has defeated them. I hope, none the less, that they will combine and collaborate with a view to solving the difficulty.
  Amendment negatived.
  Mr. Manningham-Buller: I beg to move, in line 24, at end, insert:
  "Provided that where since the thirty-first day of March, nineteen hundred and thirty-nine, an interest in land or part thereof has been valued for estate duty purposes at a figure higher than the value ascertained as

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  aforesaid, the value for estate duty purposes shall be deemed to be the value of the interest in land or part thereof purchased pursuant to a notice to treat served at any time within the period of five years from the commencement of this Act."
  I hope that in moving this Amendment I shall not be accused of drawing a red herring across the trail or anything of that sort. The simple object of the Amendment is to avoid an anomaly arising in the future. It may be, with the law as it now stands, that a short time before a property is acquired by a local authority at 1939 prices, that property has been valued by the Revenue for purposes of Death Duties. The individual concerned will have a real grievance, if, after he has paid Death Duties on a certain valuation of the property, the local authority, supported by the Minister of Town and Country Planning, come along and say that no matter what the Chancellor of the Exchequer has said, and though he may have put the value 100 per cent. above the 1939 value, they will only pay the 1939 value, which is far less. The object of this Amendment is to provide that where Death and Estate Duties are paid on an estate after 31st March, 1939, at a higher value than the prices calculated in accordance with this Clause, then the Death Duties valuation shall be taken to be the valuation at which the property is purchased by the local authority. If that is done, it seems to me it will rule out a possibly serious anomaly. If the Chancellor says that instead of the Death Duties valuation, he is prepared to accept the prices calculated in accordance with the 1939 prices, then I would be prepared to withdraw the Amendment, but I do not imagine he will accede to that. If he is not prepared to do so, then I suggest that the price should be brought up, in those particular instances, so as to avoid an obvious anomaly which will create a great feeling of injustice among those unfortunate people.
  6.0 p.m.
  The Chancellor of the Exchequer (Sir John Anderson): Before I come to the substance of the Amendment, I might Perhaps say one brief word about Estate Duty administration in relation to this problem, in amplification of the few words I spoke in reply to an intervention by my hon. Friend the Member for South Croydon (Sir H. Williams)—who is not in his place—on the Second Reading of this Clause. Under the Act governing the assessment
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  of property for Death Duties the basis upon which the taxing authorities have to proceed under the present law is the normal basis of current market value. Under war conditions, as hon. Members will readily understand, that basis has proved, in practice, to be very far from satisfactory. Nevertheless, that is the law and the valuers have to make the best of it. The alternative which we adopt for the purpose of this Bill, of replacing current market value by 1939 values, is not available for Estate Duty purposes, because it would involve, in certain circumstances, very great hardship to persons who have already been subjected to the hardship of a death, perhaps the death of the bread-winner in that family. What adoption of 1939 values would mean would be the acceptance of 1939 values as a basis of tax where, in fact, property might have had to be sold on the death of the owner under very adverse circumstances and fetched a greatly reduced value.
  Therefore, the tax authorities have to work on the basis of the existing law, and do the best they can to arrive at current value. They tell me that they have to recognise, in the process of the negotiations that go on before a settlement is reached, a margin—it may be a very wide margin—for differences of opinion and so great has the practical difficulty proved to be, that the taxing authorities have been compelled, with Ministerial approval, to adopt just the distinction that is made in this Bill between the owner-investor and the owner-occupier. Where the estate concerned is an estate involving occupation, and where it is clear that it is not to be sold, the tax authorities are at liberty to levy the tax on the basis of the 1939 values.
  Now I come to the substance of the Amendment, and I am going to surprise my hon. Friend. I recognise the anomaly of an assessment, at more than 1939 values, of an interest which has passed on death, and which is subsequently acquired by a local authority at a lower basis of compensation than that on which Estate Duty has been levied. But I do not think the Amendment is one that it would be proper to accept, because acceptance would mean that the local or other public authority which had to pay compensation, would be bound by something quite irrelevant, by something which had been done by some other authority

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  operating under a different code of law. So I cannot accept the Amendment, but what I can and will do is this: I will give an assurance on behalf of the Government that when such a case does arise, if, after Estate Duty has been assessed, there is subsequent acquisition, and the price at which the property or interest is assessed is less than the value taken for the purpose of Estate Duty, then I will provide for the re-opening of that assessment, so as to get rid of any inconsistency between the value on which the taxing authority has proceeded, and the value under this Bill for the purposes of acquisition.
  I have ony two points that I must safeguard in that connection. The first is that I think it will be essential so to frame the appropriate arrangement, which will have to be embodied in the next Finance Bill, as to apply only in cases where there is continuity of ownership. If the interest has been played about with, so to speak, in the interval between the two transactions, so that it cannot be identified, then the relief I am proposing may not be possible. The other point that must be safeguarded is that the interest which has to be dealt with must be substantially the same in the two cases. For instance, a reversionary interest at the date of death is one thing, and two or three years later it is something different. I, therefore, propose to bring before the House in due course an Amendment which will substantially get rid of any inconsistency between the basis of valuation for Estate Duty and the kind of case which my hon. Friend has in mind.
  Mr. Hughes: Will the provisions the Chancellor contemplates bringing into the next Finance Bill provide for re-adjustment in the other direction? He has said that where Death Duties have been exacted at a higher price, and the local authority has acquired the interest at a lower price, there shall be revision, but where Death Duties have been exacted at a lower price and the local authority acquire at a higher price, will his Department say that they want more Death Duties?
  Sir J. Anderson: No, it is not contemplated that we should do that, but the House will have an opportunity of looking at this matter, and if they think that it is not a properly worked-out and properly
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  balanced provision, they can say what they like about it.
  Mr. Hughes: It works one way but not the other.
  Mr. Pethick-Lawrence: The Chancellor said that the practice of his Department up to now had been to distinguish between the owner-occupier and the owner in regard to Death Duties, but as I understood him, he did not explain what the distinction was, and I would be glad if he could do so, or perhaps tell me that I did misunderstand him.
  Sir J. Anderson: I may not have made myself quite clear, and I shall be glad to clear up the point because it is perfectly simple. I said that, in practice, the taxing authorities have found the basis of current market value so difficult in present conditions that they have been compelled to make a distinction between the owner-investor and the owner-occupier, because they found that hardship—indeed, intolerable hardship—might otherwise be inflicted in certain cases, after the death, say, of the father of a family, and where the widow and her children desired to go on living in the same house, which might have, in the immediate circumstances of the moment, a higher market value than the value at March, 1939. In order to avoid such hardship, the taxing authorities have been authorised to accept in such a case, as the basis of Death Duties, the March, 1939, values, subject to their having an assurance that the property would remain in occupation, and would not be thrown on to the market.
  Mr. Manningham-Buller: I would like to thank the Chancellor for the way in which he has accepted the object of this Amendment. In view of his entirely satisfactory assurance, I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  The Deputy-Chairman: Sir John Mellor.
  Sir J. Mellor: The purpose of the Amendment in my name—in line 25, leave out Sub-section (2)—is to obtain an assurance that we shall not be precluded from having a full discussion on the new Schedule to which this Sub-section leads.
  The Deputy-Chairman: I am sorry, but there is so much noise on my right that I must ask the hon. Gentleman to repeat what he has said.
  Sir J. Mellor: I was saying that the purpose of my Amendment is only to keep open the way to a full discussion that may appear necessary on the new Schedule to which this Sub-section leads. But if, in your view, Mr. Williams, we shall not be precluded, and it will be more convenient to ask for an explanation of the meaning of the new Schedule when it is reached, then I should not propose to move my Amendment.
  The Deputy-Chairman: If the hon. Gentleman wishes to discuss the Schedule on a main point, he can do that on the Motion, "That the Schedule be read a Second time," and can divide against it if necessary. I think that arrangement would meet his point of view.
  Sir J. Mellor: I only wanted to make quite sure that we would not be stopped, by allowing the Sub-section to pass unchallenged, from having a full discussion, if necessary, on the new Schedule. In view of what you have said, Mr. Williams, I do not propose to move my Amendment.
  Mr. Hutchinson: I beg to move, in line 29, at end, insert:
  "(3) If at any time any order is made under Section eleven of the War Damage Act, 1943 (Power to increase amount of value payments) directing that the amount of value payments in any cases or classes of cases which would otherwise have been computed as provided by that Act, shall be increased by a sum equal to such proportion of the amount computed in accordance with that Act as may be specified in such order the Minister may by order direct that the compensation payable under this Act shall be in the like cases or classes of cases be increased by a sum equal to a like proportion of such compensation."
  This Amendment comes before the Committee at a rather late stage and in circumstances in which the prospects that I shall successfully persuade my right hon. Friend to examine it with much sympathy are, I fully appreciate, not very great. I commend this Amendment to the Committee upon two grounds. One of the grounds, I hope, will appeal to my hon. Friends on this side. The other, ought to appeal to some of my hon. Friends on the other side of that Committee.
  This Amendment seeks to place the compensation in respect of properties which are to be acquired by a planning authority upon the same footing as properties which will be entitled to a value payment under the War Damage Act. The first ground on which I desire to
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  commend the Amendment is this. I can put it most plainly by taking a concrete example. Under this Bill the owner of property which is acquired compulsorily by a planning authority will receive a lower rate of compensation than will be paid to the owner of precisely the same type or character of property which has been destroyed by enemy action, who will become entitled to a value payment.
  6.15 p.m.
  Let me put this case as an example of what I have been saying. Take two houses, neither of which are occupied by their owners. They may be situated in the same street. One is totally destroyed by enemy action. The owner becomes entitled to a value payment under the War Damage Act, with the prospect that, at a later stage, he will receive a further sum or supplement which will be such proportion of the value payment to which he has already become entitled on the standards of 1939 as may appear to the War Damage Commission, to the Treasury and to this House as being just in the circumstances of the time when the value payment comes to be made. He has the prospect of receiving not only the 1939 standard, but something in addition to compensate for alterations in the value of money and other things. The owner of the other house, which may be of precisely the same type and character, which is not damaged by enemy action, but which is acquired by the planning authority in the course of carrying out a scheme for planning a particular area rendered necessary by enemy action, will receive the 1939 standard and nothing more. What justice or justification is there for paying these two types of owners different standards of compensation? I ask my hon. Friends on the other side of the Committee, if a constituent asks "Why am I to be paid something less than my neighbour because my house has not been damaged but acquired by the local authority?" what would their reply be? It will be no good saying, "No more concessions"; the owner will not be satisfied with that. Unless these two classes of owners are put upon the same footing, the substantial justice which my right hon. and learned Friend claimed for this Bill the other day will not be forthcoming.
  Let me come now to the second ground upon which I desire to commend the

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  Amendment to the Committee. This is a ground which, I appreciate, may not appeal to all my hon. Friends on this side. If the Amendment is adopted the Committee will in fact be carrying out the recommendations of the Uthwatt Report, so far as I have been able to understand them, as nearly as it is practicable to carry them out. There are certain aspects of the Uthwatt Report with which I am, frankly, not in agreement; but it is of some interest to see what the Uthwatt Committee recommended about this question of the 1939 standards and their relation to the War Damage Act.
  My right hon. Friend the Member for Devonport (Mr. Hore-Belisha), in moving his Amendment earlier, referred to this part of the Committee's Report and I will refer to it again. The Committee had already recommended that the 1939 standard should be adopted. In their final Report they proceeded to refer to certain considerations which they thought might make it necessary to explain that recommendation. One of those considerations was that the value of money may have changed. They go on to deal in more detail with each of these considerations and, when they come to the question of the change in the value of money, they say this:
  "We do not propose to make any observations upon modifications of the maximum due to changes in the value of money. We merely recall that our recommendation referred to a standard of values and not to prices and that the matter of the change in the value of money has been the subject of legislative treatment in the War Damage Act, 1941, in connection with the quantifications of sums payable under that Act."
  If that passage means anything, it means that when the Committee recommended that the 1939 standard should be adopted they did not preclude the possibility of that standard being subsequently enlarged in order to meet changes in conditions which might occur later. They expressly drew attention to the matter to which I am now drawing attention, namely, that the War Damage Act already dealt with the same situation by providing what has been called an escalator, in order to give effect to changes that may have taken place in the value of money or other relevant circumstances. This Clause does not give effect to the recommendations of the Uthwatt Report in the same manner as effect would be given to those recommendations by my Amend-
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  ment. Therefore I commend this Amendment particularly to hon. Members on the other side of the Committee.
  There is general agreement on both sides that one of the purposes that we have in view is to prevent the owner or any other person interested in property from securing for himself some advantage which is attributable to the disturbed conditions of the war. That was the basis of the recommendation of the Uthwatt Committee that the 1939. standard should be adopted. But that is not by any means the same thing as saying that we ought, because of the war, to impose any avoidable loss on any owner of property. For these reasons I commend this Amendment to the Chancellor. I invite him to see whether, in spite of everything that has happened to-day, it might not still be possible to find in it some common ground of agreement as to the basis on which these claims for compensation are going to be met. I am not entirely without hope that by following the procedure which this House has already adopted in the War Damage Act, we can find a basis which will be acceptable to the whole Committee and which will do essential justice to persons whose property will be acquired under this Act.
  Mr. Hare-Belisha: This is a matter of very great importance to householders and to businesses. The Chancellor of the Exchequer made a sympathetic answer just now when he was invited to bring into relation the valuation for Death Duties payment and the valuation of property under this Act. The case advanced by the mover of this Amendment is very similar. I had an Amendment down myself, which was not called, and which, in principle, advocates exactly what the hon. and learned Gentleman has suggested. A person loses his property partially or wholly. It is damaged or destroyed, and the owner becomes entitled to a payment under the War Damage Act. He might become entitled to a cost-of-works payment, or a value payment, but in either event, his position might be transformed as the result of this Bill and as the result of a compulsory acquisition of property under this Clause. If, for instance, the property were acquired under this Bill and he was entitled to a value payment had it not been for the Bill, that value payment might have been increased under the Sec-

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  tion referred to by the hon. and learned Gentleman. But if the Clause were passed without the Amendment, and without bringing the two Acts into relation, you would be definitely depriving the claimant of a sum to which he would be entitled under another Act. The same principle applies to a cost-of-works payment. By virtue of the fact that there is a compulsory acquisition under the terms of this Clause, the owner loses the cost-of-works payment. It cannot be the intention of the Government to put anyone in a worse position as the result of the Bill. I plead with the right hon. Gentleman to bring the two Acts into fair relation. An investor in property would certainly be very much damnified as the result of the Bill. If he is entitled to a cost-of-works payment he loses it completely, and he loses his right to a heightening of the value payment under Section 11 of the Act. I hope the right hon. Gentleman will consider the matter sympathetically. I gather from the expression on his face that he is not so well-disposed as I should have hoped, but there are Members on both sides who feel the justice of the claim and feel that there ought not to be a distinction in the method of assessing values under the two Acts.
  6.30 p.m.
  Sir J. Anderson: The expression which my right hon. Friend thought he detected on my face was not an expression either of sympathy or of lack of sympathy. It was rather an expression of mystification. I may be very stupid, but it seemed to me that my right hon. Friend was addressing himself to a quite different point from that raised by my hon. and learned Friend the Member for Ilford (Mr. G. Hutchinson). As I understand my hon. Friend's point—quite irrespective of whether I agree with him or not—it briefly was to bring the two Measures into line for the purpose of securing that if and when, under the War Damage Act, what we called the escalator Clause is put into effect, a similar provision should be made with regard to compensation under the Bill; because he says you could not argue convincingly that a person who had suffered war damage, should be treated better than a person whose property had been taken by some public authority.
  My right hon. Friend, on the other hand, was dealing with the case of a
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  person who, under the War Damage Act, had been entitled to a cost-of-works payment, and had had his claim in respect of a cost-of-works payment accepted; but, by reason of the fact that his property is being acquired by a public authority, has to have a value payment instead of a cost-of-works payment. That, with the very greatest respect, is a quite different point, though they both involve the general purpose of trying to bring the two Statutes into line.
  May I address myself to that general purpose, with which everyone would, at the outset, have a certain sympathy? I hope that I shall have the indulgence of the Committee in this matter, because it is very technical, and I have to keep a very tight hold on myself, to make quite sure that I do not stray. The first question I have to ask is this—I am not going to quote any Latin on this occasion—Is it possible, in practice, to bring the two codes into line? They make an entirely different approach. The War Damage code is concerned, in the first place, with buildings and not with land. The buildings and the land are to be separated. The Town and Country Planning Bill is concerned with interests in land, or buildings. Secondly, the War Damage Act is concerned with the property as a whole, and not with the separate interests. It does not deal with the separate interests. The Town and Country Planning Bill deals with the question of compensation for each separate interest.
  Mr. Hutchinson: I am sure that my right hon. Friend desires to do justice. I would point out to him that the proposed Amendment provides that the Minister of Town and Country Planning shall be entitled to make an order dealing with any class or classes of case. It does not propose that the order shall apply universally to every class of case.
  Sir J. Anderson: Yes, I want to do justice to that but I also want to make myself clear. The last intervention has confused the matter, because while, under my hon. Friend's proposal, the Minister of Town and Country Planning would be entitled to make an order dealing with any particular class of interest, that is precisely what the War Damage Act does not enable the Minister to do. That is the point I was making. The War Damage Act is concerned with the

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  property as a whole, and not with the separate interests. I think I am right in saying that, as it stands, there is no power to anybody, under the War Damage Act, to separate the different classes of interest and make separate orders with regard to them. I think you can deal with classes of property but not with classes of interest.
  Anyhow, what I am seeking to do now is to address myself to the general proposition that the two codes should be, if possible, brought into line, and I am explaining to the Committee certain practical difficulties. I was coming to the third point, which hon. Members may not have clearly in mind. My hon. Friend talked about scaling up values for the purpose of taking account of changes in the value of money. I assume that we are not being asked at this point to go over the ground that was covered before the Division which took place a short time ago on that very question. What I have to say about the War Damage Act in that connection is that changes in circumstances which may be taken into account, as the War Damage Act stands, are limited to changes in circumstances since the date of the Act, that is to say, since April, 1941. Any change between March, 1939, and April, 1941, is not within the competence of Section II of the War Damage Act. Therefore, I say that it is not really practicable, in my view, to attempt to bring the two codes into line in the course of framing the Bill.
  That does not, however, dispose of the question raised by my hon. and learned Friend, because the point of his Amendment is to ensure, somehow or other, that the compensation paid to a person whose property has been taken by a local authority for a public purpose shall not be less favourable than the compensation paid to a person whose similar property, assuming there is no division of interest for this purpose, has been damaged. I am entirely in sympathy with that view. I do not myself see how you could justify treating a person, whose property is taken selectively by a public authority for some public purpose, less favourably than the person whose property has been damaged as a result of the war; but that does not lead me to the same conclusion as it leads my hon. and learned Friend.
  I do not think that we can deal with the contingency that he has in mind by an
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  Amendment of the Bill. We do not know, we cannot tell, what may ultimately be decided under the War Damage Act. That Act did not contemplate any speedy action to take account of changing circumstances. What it contemplated, as the wording of the Act clearly indicates, was that when the time had come for making any substantial number of payments in respect of value awards under the Act, the position should be reviewed, and a duty was put on the War Damage Commission to make a report to the Government, if it appeared to them that, by reason of the changed circumstances since April, 1941, the scale of value payments made by the Commission under the Act was inadequate, in regard to any particular classes of case, or generally. But that is all in the future; that is all contingent. There is no obligation on anybody to step up compensation payments under the War Damage Act in consideration of any change in the cost of living.
  The Act will have to be carried out; if is on the Statute Book. In due course, these matters will have to be considered, and if the War Damage Commission, which is a body of a judicial nature, makes a report, the Treasury will have the duty to consider it, and may report to Parliament in favour of making some change. What form that change will be we cannot anticipate, and because of the basic differences in the two Measures it would be quite impossible and wrong to pledge the Minister now to do exactly the same in regard to compensation payments under this Measure as might in due course be right under the War Damage Act.
  There is a further reason for the distinction. That is that in the case of the owner-occupier the Town and Country Planning Bill already provides for scaling up the compensation in recognition of the circumstances at the moment of acquisition. I do not suppose that my hon. and learned Friend would claim that if his Amendment were otherwise acceptable it should apply as it stands to the case of the owner-occupier, who is already getting a settlement by his compensation payment, in exactly the same way as it applies to the owner-investor. Clearly that would be wrong, so the Amendment as it stands on the Order Paper would in any case fall. What I do say is that if and when in due course the Government and Parliament have to consider the applica-

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  tion of what we call the escalator Section under the War Damage Act we shall certainly, in my view, for the reasons my hon. and learned Friend has adduced, have to consider afresh the provisions of the Clauses in this Bill dealing with compensation. That, I am afraid, is all I can say on the matter now. I sympathise with the purpose of my hon. and learned Friend's Amendment, but I think the time for dealing with the matter will not come until the question of the escalator Clause under the War Damage Act becomes a practical question.
  Mr. Wilmot: With regard to this curious series of anomalies which seems to be appearing as a result of the differing provisions of these two Measures, I would like to ask the Chancellor's consideration of a class of case which immediately arises from what we have done in this Committee. There is, let us say, the owner-occupier of a war-damaged factory who would, if it was not acquired under this Bill, get a cost-of-works payment, which would be a sum of money to repair his damaged property and put him in possession of it again in order that he may carry on his occupation.
  The Attorney-General: I must correct the hon. Member. A cost-of-works payment is only given when the work has been done. It is not a sum intended for a certain purpose. It is the paying of a builder's bill.
  Mr. Wilmot: It would be intended that the money should be given when the work is done; it is conditional upon the work being done. The intention is that the owner-occupier can repair his damaged premises and carry on his occupation. The Town and Country Planning Bill enables a local authority to acquire ruins for the purpose of clearance and replanning the town, a very desirable purpose. If the property we are considering had not been damaged, the owner-occupier, because he was an owner-occupier, would get additional compensation. But it is damaged and he is to get a cost-of-works payment when he can repair it, but the local authority now acquire it for town planning purposes. They buy the ruin and the moment they do that he loses his qualifications for his cost-of-works payment. He is forced back to a very much lower level in most cases, as we know from the amounts of value payments.
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  6.45 p.m.
  I understood from the statement made by my right hon. Friend the Deputy Prime Minister about this matter that there was clearly in his mind—he said it in fact—that persons whose property which had been damaged by enemy action was acquired by public authorities should not be placed in a worse position because the property was so acquired. The owner-occupier will be in a very much worse position; he will lose his cost-of-works payment, because he will be unable to rebuild on the site, and the cost-of-works payment is conditional not only upon rebuilding but on rebuilding on that site, as I understand it. If it is not so I shall be very delighted to hear it. He is stopped from rebuilding on that site because the local authority have acquired that site, and he is driven from his cost-of-works payment on to a value payment. I suggest that some compensation should flow to him, or he should be able to take that cost-of-works payment and apply it to some other site, because he is prohibited from using his old site by reason of the action of the planning authority.
  Sir J. Anderson: My hon. Friend, if he will allow me to say so, is under a misapprehension. What my right hon. Friend the Deputy Prime Minister said was this—I do not quote his actual words but I give the substance: He said that a person whose property has suffered war damage and has then been acquired should not be treated differently from a person who has had his property acquired without having suffered war damage. That is what my right hon. Friend said, and that is secured by this Bill. My hon. Friend is addressing himself to an entirely different case. This difference between the person who under the War Damage Act would, in the ordinary course, get a cost-of-works payment and, because it is made impossible for him to restore his property on its original site, can get only a value payment, is not a consequence of, this Bill. It has nothing whatever to do with this Bill. If there had been no Bill of this kind there would still be many cases in which damaged property which would qualify for a cost-of-works payment would, by reason of acquisition under the many provisions of existing law which allow acquisition for various purposes, have to fall back upon a value payment under the terms of the War

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  Damage Act, which we are not amending. That is a result which flows from the terms of the War Damage Act, and the fact of acquisition, irrespective of whether the acquisition is under this Bill and subject to the special provisions of this Bill, or is under any other Act which enables property to be taken for a public purpose.
  Mr. Wilmot: With the greatest respect to the Chancellor I go back to the words used by the Deputy Prime Minister. I agree with the Chancellor that he said that a person whose property has not been damaged shall not be put in a better position under this Bill than a person whose property has been damaged, but it is exactly what will happen, because the owner-occupier who has not had his property damaged will get compensation up to 30 per cent. above the 1939 level because of his occupancy, and the owner-occupier whose property has been damaged will, by this Bill, be transferred from a cost-of-works to a value payment, and will be in a very different position from a man whose property has not been damaged. I think all this makes it necessary for us not to drift on in the hope that the War Damage Commission will do something about it, but for this House to take action to bring these two Measures into accord so that these injustices are removed.
  Sir J. Anderson: My hon. Friend is still under a misapprehension. The man whose property is war-damaged, and who would qualify for a cost-of-works payment but who gets only a value payment because the local authority intervenes and acquires his property, is in exactly the same position under this Bill as if the property had not been war-damaged; because the supplement which is applicable to the owner-occupier whose property is not war-damaged is made applicable, by the next Clause in this Bill, to the owner-occupier who has qualified for a cost-of-works payment, exactly as if his property had not been damaged. His property, having a cost-of-works payment attached to it—if I may put it like that—is treated, for the purpose of the supplement under the following Clause, dealing with the owner-occupier, as if it were undamaged property. My right hon. Friend the Attorney-General will deal with that point, but I know he will bear me
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  out. I intervene only in order that we may get the thing clear.
  Dr. Russell Thomas: I want to make one point in regard to what the Chancellor said about the escalator Clause in the War Damage Act. Many of my constituents are affected by it. He said that the escalator Clause would not be put into operation until some remote future.
  Sir J. Anderson: I did not say "remote."
  Dr. Thomas: I think the right hon. Gentleman did—perhaps he will look at his notes. At any rate, he gave the general impression that it would be at some very long time ahead. The War Damage Commission will have to make a report to the Treasury, and the report will have to come before this House. I would point out that representations have already been made to the Chancellor pressing for a decision on this matter. Many people are seriously affected, and I hope that the War Damage Commission will make up their mind rather sooner than my right hon. Friend gave the impression that they would.
  Captain Duncan: The answer of the Chancellor of the Exchequer will be a little disappointing—although perhaps that is inevitable—to the owners of property. I have had brought to my attention a case which I think my right hon. Friend should listen to. It is the case of a charitable trust, which owns property near St. Paul's Cathedral. Under the War Damage Act, this property would, I presume, qualify for a value payment; but, being near St. Paul's Cathedral, it is almost certain to be the subject of a planning scheme by the City Corporation, and, not being owner-occupied—for the trustees of charitable property cannot be regarded as owner-occupiers—it will be debarred from any supplement under the escalator Clause of the War Damage Act.
  Sir J. Anderson: The War Damage Act includes owner-occupiers.
  Captain Duncan: This is not owner-occupied. These things are very complicated, but I am trying to put the matter as clearly as I can, surrounded, as I am, by a battery of lawyers. Under the War Damage Act this property, which has been destroyed, is eligible for a value

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  payment, and that would be open to supplementation under the escalator Clause of the War Damage Act. The City of London Corporation, however, will acquire it at the 1939 price, without any supplement of any kind. Therefore the trustees, who for years have been doing valuable charitable work in Kensington, both educational and philanthropic, will be to that extent deprived of the opportunity to continue that work. The hon. Gentleman opposite seemed to think of the landlord as some rich villain, but here is a case where the freeholders are going to be deprived of the opportunity of doing good—although they are landlords—to the poor of Kensington, simply because the supplementation which would be available under the War Damage Act will no longer be available because of this new Clause, which allows of no supplementation on the 1929 price.
  Mr. Hutchinson: I am grateful to my right hon. Friend for the manner in which he has dealt with this Amendment; I am particularly glad to find that he recognises that this Clause will involve an injustice, which he is desirous of setting right. It seems to me unfortunate that we should pass this Clause, containing, as it does, an admitted injustice, and that we should be unable to find any means by which that injustice could be remedied. I am grateful to my right hon. Friend for the assurance that, at some later stage, when a report is made by the War Damage Commission, under Section 11 of the War Damage Act, the quantum of compensation payable under this Bill is to be reconsidered. I hope that I understood the assurance correctly. I would ask my right hon. Friend, before I withdraw this Amendment, to go one step further, and to undertake to consider, between now and a later stage, whether this injustice, which he admits to exist, cannot be put right by some further Amendment of this Clause. Having said that, and having expressed my gratitude to my right hon. Friend—
  Mr. Hore-Belisha: I would like to get this absolutely clear, because there may be a misapprehension; and I am not quite sure that it is entirely on this side. Let me deal with the case put by the hon. Member for Kennington (Mr. Wilmot). Suppose the property is damaged in the ordinary way, or destroyed. It may be entitled to a cost-of-works payment if the
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  building is of such-and-such a character. An application is made to do the repairs which are necessary. It is refused, on the ground that the local authority are going to acquire the property. The result is that the house-owner, or the occupier, or the shopkeeper, or the tenant, has to take other premises and to pay rent. He is out of his premises altogether. Another shop or house may remain intact until the very last moment, and there is no inconvenience caused. Can I have an assurance that a person who would have been entitled to a cost-of-works payment, or, it may be a value payment—but the cost-of-works payment is a stronger case—and who, throughout this period, has been out of his property, will not be worse off under a compulsory acquisition order under this Act than he would have been otherwise? I do not know if I have made myself clear. The whole Committee feel that the Chancellor has done his best to make the position plain, but I would like to feel satisfied on that point.
  7.0 p.m.
  The Attorney-General: That is done, of course, under the next Clause, but I agree it has a certain relevance to this Amendment and my right hon. Friend is quite right. I will try to put it in quite simple words. Take the case of a man whose house has been damaged, maybe very badly damaged. The point is that he has been earmarked for a cost-of-works payment. Of course if it was not acquired by the local authority that would mean that the fund would pay the builder; the man would be entitled, out of the fund, to a habitable house reconstructed as it was before the damage. When it comes to be acquired by the local authority, he will get compensation as if his house had not been damaged, that is to say, he will get the 1939 value of the house as if it had not been damaged. He will not be deprived of the owner-occupier bonus merely because he does not happen to be in occupation.
  Mr. Hore-Belisha: He will, in fact, be worse off than if he had a cost-of-works payment?
  The Attorney-General: No. Surely it would hp quite wrong that he should he given a sum over and above the cost of repairs in 1939 simply because building happened at the moment to be very expensive. I do not think he would be worse

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  off because he would get compensation as if his house had not been damaged. The investor gets exactly the same, but he does not get the supplement. The value payment, of course, is quite a different problem.
  Mr. Hughes: Before the Amendment is withdrawn, may I raise one point? The hon. and learned Member for Ilford (Mr. Hutchinson) suggested that the Chancellor of the Exchequer had given an assurance to the Committee that when, under the procedure of the War Damage Act, application was made by the War Damage Commission, and duly approved and forwarded by the Treasury and submitted to this House for approval in the form of an Order, on that procedure being applied and the escalator coming into force, something should be done in relation to this Bill we are now considering. I did not myself gather the right hon. Gentleman's remarks, and I think it would be appreciated if the point could be cleared up.
  Sir J. Anderson: I want to make this absolutely clear and to have no room for misunderstanding on what was said from this side. I did not give any assurance, perhaps, in the sense that the hon. and learned Member for Ilford (Mr. Hutchinson) accepted. What I did say was that
  I agreed with the general principle of his Amendment that there should not be more favourable treatment of the war damaged person than of the person whose property has been taken without any war damage. I said, therefore, that there would have to be some step taken at the proper time to bring this Bill and the War Damage Act into line, but I held out no particular expectation as to the form which the process of assimilation might take. That will be within the control of the House at the proper time. What the Committee should understand from me is that I did say, on behalf of the Government, that we recognise that, if and when the question of applying the provisions of the War Damage Act, either as they stand now or with amendments in respect of what we call the escalator—if and when that question arises, the form of these provisions in this Bill will have to be looked at again. That is the assurance I gave.
  Mr. Hutchinson: I am obliged for what the right hon. Gentleman has said. That was what I understood him to say in the
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  first instance. Perhaps the fault was mine for introducing the expression "assurance." Perhaps it would be as well that I should not make a second attempt to paraphrase what he has said; and so I again express gratitude to him for at least this small measure of comfort, and now beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Sir G. Schuster: I beg to move, in line 32, at end, add:
  "() Where any person entitled to compensation for the compulsory acquisition of an interest in any land assessed in accordance with Sub-section (1) of Section of this Act (hereinafter referred to as 'basic compensation') erects, within the area of the local planning authority by whom such basic compensation is payable, a building of a value not less than that of any building which existed on the said land immediately before its compulsory purchase (or, if the said land has sustained war damage, immediately before the occurrence of such war damage and if the said land has sustained war damage on more than one occasion, immediately before the occurrence of the first war damage) and completes the erection of such building within five years from the commencement of this Act, the person so entitled to basic compensation shall also be entitled, in addition thereto, to recover a sum (hereinafter referred to as 'additional compensation') equal to the amount by which the proper cost (in terms of Section eight of the War Damage Act, 1943) of erecting the said building exceeds the aggregate of—

  (a) the basic compensation for the compulsory purchase of the said land; and

  (b) the amount (if any) paid or payable by the War Damage Commission to the person entitled to such basic compensation in respect of war damage within the meaning of the War Damage Act, 1943, sustained by the said land.

  Such payment of extra compensation shall be made on the completion of the reinstatement of the said building, and the amount thereof shall in default of agreement be settled by an official arbitrator appointed under the Acquisition of Land (Assessment of Compensation) Act, 1919."
  I must apologise to the Commitee for bringing forward this Amendment at so late an hour. What I am proposing, in fact, goes to the very roots of the matter, because, in this Clause, I am proposing to introduce a new criterion, a distinction, not between owner and owner-occupier, but between reinstater and non-reinstater. One naturally hesitates to talk at length on this Measure, when one realises how technical it is, but we are concerned with the practical position as it will be. The people we are concerned about are those

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  who will get cash compensation under the present proposals, and who may not be in a position to acquire for themselves equivalent accommodation. The words which I have put down on the Order Paper suggest a means for ensuring the possibility of reinstatement without asking the Government to commit themselves to he very generous in the way of cash compensation, which might be taken in the form of cash profit, by persons whose property had gone up in value, or because of whatever change in economic conditions there might be.
  The short effect of what I am proposing is that everyone, whether owner or owner-occupier, would be entitled to basic compensation on the basis of the 1939 prices, but that any person who decided to claim compensation under this Bill, and who was willing to reinstate the property, would be able to claim an additional payment to cover the extra cost of building, as compared with 1939 costs. I want to make that quite clear. I did not intend to propose that a man should be able to get a new house for an old one. It may be the effect, but that was not the effect that I provided for, and I was told that the words I used would avoid that. I hope it may receive serious consideration, and I put it forward, not in any hope that the Government will alter their whole scheme of legislation at the present stage, but in the hope that my right hon. Friend will take this proposal into serious consideration in the sense that some modification of what I am proposing may offer a way out of many very difficult cases. I do not wish to say more at this stage, but I would make one further point in explanation of what I am aiming at. I would put it to the Committee, and to the Chancellor of the Exchequer if he were here, that a general provision on those lines would really be extremely helpful to the general financial position. I appreciate that the Government would not wish to encourage unlimited expenditure on house building in the years after the war. That will have to be closely controlled, if it can be controlled, but it is also very important that there should not be large sums of money paid out in compensation in the form of cash. That would have a definitely inflationary effect. If there is a chance for people who are willing to reinstate to get extra payment the cash paid out will be earmarked against houses arranged to be
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  constructed. That is an important point. The local authorities will avoid having to pay out money twice over, to the person buying the house and to the builder.
  Captain Duncan: May I ask my hon. Friend why he restricts this Clause to erecting another building within the area of the local authority?
  Sir G. Schuster: Because it would necessarily be better controlled; each local authority should control reinstatement within its own area. I hope that the Committee before it parts with the Measure will express strong views that the local authority will provide for the reinstatement of those whom it displaces.
  The Parliamentary Secretary to the Ministry of Town and Country Planning (Mr. Henry Strauss): My hon. Friend the Member for Walsall (Sir G. Schuster) has moved an Amendment to which he has devoted much thought with commendable brevity and persuasiveness. As he says, it proposes a scheme which differs fundamentally from the scheme that we have been considering during the course of this very long Debate. He will not be surprised that the Government are unable to advise the Committee to accept it. It will be sufficient perhaps if I indicate some of the very real difficulties to which it would give rise, because I think my lion. Friend would like to consider them. The effect of the adoption of the Amendment and a number of consequential Amendments, including the omission of the next Clause which we shall come to consider in due course, would be fundamentally to alter the basis of our proposals. It would abandon a differentiation between owner-occupiers and other owners in favour of paying to those owners who rebuild their properties within five years from the commencement of the Act the cost of erecting the new buildings. I would give some reasons for suggesting to my hon. Friend that that would not be right or fair either to the owner-occupier or to an owner who is not an occupier. I will deal first with the case of the owner-occupier. The object which my hon. Friend has in mind is to afford him when he is displaced an opportunity of reinstating himself. But it would be quite unfair that he should have this opportunity only if he were able to erect a new building within five years from the coming into force of the Act. That is not a very likely chance in view

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  of the probable shortage of labour and materials within that period. The chance of reinstatement within the period might very well depend on the opportunity of acquiring an existing property or an interest in an existing property comparable to the property or interest which was being acquired. If my hon. Friend will think of the very great limitation that the adoption of his Amendment, however well intended, would place on the owner-occupier, he would find that as regards the owner-occupier the proposals of the Government are more favourable.
  7.15 p.m.
  To turn to the case of the owner who is not an occupier, my hon. Friend would differentiate between the owner who desires that his investment should be in landed property and others who would invest their purchase money otherwise. But how could we work out that distinction in practice and in administration? If the owner were only to receive the addition provided he rebuilt, he would elect to rebuild in every case but then might immediately sell. Is it intended by my hon. Friend that there should be some restriction on the owner to prevent him from selling within a certain period? Unless there were such a provision it is difficult to see how the Clause would work, though on the other hand such a provision would need a most elaborate code.
  The Amendment as it stands would have the effect of giving a new building for the old, but I accept at once that that is only by an accident of draftsmanship and that is not his intention, and therefore I make nothing of that point. But there is another point to which attention should be given. As long as building control lasts, licences may be obtainable for some classes of building and not for others. This would make the advantage given to the landowner absolutely contingent upon whether the particular class of building that he desired to erect happened to be one which could be licensed at that time. Finally there is the matter that my hon. and gallant Friend the Member for North Kensington (Captain Duncan) mentioned. It is a little illogical, although I appreciate the reason which guided my hon. Friend, that the payment should be based on the re-erection of the building in the area of the same local authority. I have pointed out
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  the serious difficulties that the scheme would involve. It is quite inconsistent with the whole basis of the Government's proposals, and I must advise the Committee to reject it, unless my hon. Friend, after I have called attention to these matters, sees fit to ask leave to withdraw the Amendment.
  Sir H. Williams: I have a great respect for my hon. Friend the Parliamentary Secretary. I often wondered whether they had a typewriter at the Ministry of Town and Country Planning. I now know that they have, because I am certain that, if my hon. Friend had been approaching this in the way he did when he used to be advocating the amenities of the country he would not have dismissed the Amendment in the way the typist at the Ministry of Town and Country Planning has dismissed it for him. It is a very good proposition. We are told that it is impracticable. I agree that it is in complete conflict with the vote we gave earlier on. I congratulate my hon. Friend the Member for Walsall (Sir G. Schuster) on having introduced a Clause which would have torpedoed the decision which was come to on the Minister's advice some two or three hours ago. I will not say any more, because in a few minutes we shall be discussing the Motion that the Clause be added to the Bill and that will be a more favourable opportunity and save me from getting out of Order.
  Sir G. Schuster: I do not wish to divide the Committee on this Amendment, and in asking leave to withdraw it, I wish to express the view that what my hon. Friend the Parliamentary Secretary has stated does not really provide an answer to my proposal. I agree that the period of five years might be impracticable, but that was merely put in as a token to represent the earliest reasonable period and as an appreciation of the fact that, if it is not an attractive proposition to apply for this additional payment for reinstatement, an owner could take his 1939 cash price and put it in his pocket and go. I feel that if he has that option of help to be reinstated, I have no compunction about limiting the cash he can take over the 1939 price.
  The suggestion was made that every owner might take this, but I am not at all sure that every owner would, though in that case we should have a very valu-

  317
  able agency for the rebuilding of houses. I can see no possible objection to the development by which a number of owners might take their money, and build and sell their houses. I think that will be all to the public interest. After all, this proposal would only have effect if a certain number of houses are taken and pulled clown, or houses that have been war damaged are not repaired by certain local authorities. It is not going to create an inflationary position as regards housing, because it would only deal with houses, workshops or factories which would replace existing ones. Although I shall ask leave of the Committee to withdraw this Amendment I would like to express a very strong personal view that the last word has not been said on this question—not in the sense of Parliamentary Debate but in the sense of the inherent difficulties of the problem with which we are dealing. I would venture the opinion that, as the practical operation of this Measure goes on, a great many hon. Members will feel that they would have been wise to have sought a solution on the lines that I propose in this Amendment. I beg to ask leave to withdraw my Amendment.
  Amendment, by leave, withdrawn.
  Motion made, and Question proposed, "That the Clause be added to the Bill."
  Sir H. Williams: I do not think we ought to part with the Bill without a few words, because, after all, I am certain that this is really its funeral. The decision we have taken to-day will prevent a great deal of desirable town and country planning—the decision not to pay proper compensation to people who have been misguided enough to build a house which can be let. I do not think my pink Friends opposite have a great deal of experience of local government. Indeed I sometimes doubt whether they have any experience of anything—but that is in passing. In many cases, when a proposal comes forward which will involve the compulsory acquisition of property, and a large number of people are to receive less money than will enable them to get somewhere else, not what they have lost but less, then local authorities will be under intense pressure not to carry out such a proposal. I am not basing myself on theory in this. Time and again, I have criticised something for which the late Mr. Neville Chamberlain was responsible,
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  in a Section of the Housing Act of 1925 which made certain provision for slum clearance and certain Amendments in a Housing Measure in 1933 or 1934. This laid it down that if property was condemned, the people who owned it could only get site value. In many cases that was so profoundly unjust, that local authorities failed to clear slums. There are, to-day, tens of thousands of slums in this country which would have been cleared if the compensation Clauses had been—
  Mr. Wilmot: No.
  Sir H. Williams: Yes, tens of thousands of cases where they just would not move because of local opposition. Here is a case where people own something—I see no difference between the owner-occupier and the so-called investor, and I am both. I am an owner-occupier of one house, and an investor in another which I have been doing my best to sell but I cannot induce anybody to buy it—
  Mr. Wilmot: Because the hon. Member cannot get a high enough price?
  Sir H. Williams: No, I cannot get a bid. It is quite a nice house. I lived in it and both my children were born in it; and the only trouble is that Hitler has knocked down a few ceilings but those can be repaired. However, I do not approach this from the point-of-view of an owner of landed property. I would not indulge in it if I had money to invest, because I think it is too much hard work. Looking after property is hard work, as anyone who has served on the housing committee of a local authority is well aware. Local authorities are not such good landlords as the private owners—that is only a passing remark which is nearly out of Order.
  Mr. Wilmot: It is also wrong.
  Sir H. Williams: We have now made it clear that to invest in house property is a bad thing, that you are a low class of citizen if you invest in house property, and that you are not entitled to the full value of what is taken away from you. Within a reasonable number of months from now I hope we shall be starting on a great housing programme. It is the most acute problem that faces this nation, a terrible problem. Local authorities will do a lot of building but it is quite obvious, when you remember what happened between the wars, that what they will do will be only a small fraction of the total, and you have

  319
  now said to private enterprise, "If you build a house to be let, you are doing a bad thing." I think this Committee has done a terrible thing to-day which it will regret. I have not the slightest hesitation in saying that probably within less than a year, we shall have an amending Bill because this Bill, as it stands, will paralyse town and country planning. At this time of night it is not worth while voting that the Clause should not be added to the Bill. If you add it to the Bill it will not make any difference, because the Bill is half dead as a result of what has been done to-day.
  Sir J. Mellor: I only want to raise a short drafting point. Line 10 of the Clause refers to Rule 5 of the rules set out in Section 2 of "the said Act." In reading this I thought that "the said Act" referred to the Lands Clauses Consolidated Act, 1845. I discovered, however, that the rules referred to in the said Act are actually set out in the Acquisition of Land Act, 1919. I may have been guilty of misreading the Clause, but at least I think there is an ambiguity, and I shall be glad if my right hon. and learned Friend will look at that point.
  The Attorney-General: Yes, we will certainly look at it.
  Ordered:
  "That the Chairman do report Progress, and ask leave to sit again."—[Mr. W. S. Morrison.]
  Committee report Progress; to sit again To-morrow.

CONSOLIDATED FUND (APPROPRIATION) (No. 2) BILL
Read a Second time, and committed to a Committee of the Whole House.
Bill immediately considered in Committee.
[Mr. CHARLES WILLIAMS in the Chair]
Clause 1 ordered to stand part of the Bill.

CLAUSE 2.—(Power for the Treasury to borrow.)
Motion made, and Question proposed, "That the Clause stand part of the Bill."
7.30 p.m.
Sir Henry Fildes: Could we have some explanation as to what this is all about?
The Financial Secretary to the Treasury (Mr. Assheton): This is a Consolidated Fund (Appropriation) Bill, and this Clause deals with powers for the Treasury to borrow. It is a common form, and I do not think there is anything new in it with which I need trouble the Committee.
Remaining Clauses ordered to stand part of the Bill.
Schedules agreed to.
Bill reported, without Amendment.
Motion made, and Question proposed, "That the Bill be now read the Third time."
Sir H. Fildes: I would like to know how much money we are giving sanction to borrow by means of this very casual business.
Mr. Assheton: If my hon. Friend had found it possible to be in his place yesterday, and during the preceding days when we discussed this matter, he would have heard that the amount at issue is £1,250,000,000. The Chancellor explained exactly the purpose for which the money was required, and I think the House had an opportunity of discussing the matter thoroughly. But if there are any particular points on which my hon. Friend wants to seek my advice or help I shall be only too glad to give it to him.
Sir H. Fildes: I desire to thank my right hon. Friend—
Mr. Deputy-Speaker (Mr. Charles Williams): The hon. Gentleman cannot make a second speech, but he can ask a question before the Financial Secretary sits down.
Sir H. Fildes: That is what I was endeavouring to do, Mr. Deputy-Speaker, before I was interrupted but the Financial Secretary sat down too quickly.

ADJOURNMENT
Resolved:
"That this House do now adjourn."—[Mr. Mathers.]
Adjourned accordingly at Twenty-six Minutes before Eight o' Clock.

  ITALY (PARTISANS, STATUS)
  ITALY (PARTISANS, STATUS)
  LIBERATED EUROPE (CIVIL ADMINISTRATION)
  LIBERATED EUROPE (CIVIL ADMINISTRATION)
MINISTRY OF INFORMATION
  B.B.C. News Bulletins
  B.B.C. News Bulletins
  "Chambre Chaude," France (Publicity)
  "Chambre Chaude," France (Publicity)
ROYAL AIR FORCE
  Civil Affairs Administration (Officers' Pay)
  Civil Affairs Administration (Officers' Pay)
  A.T.C. (Recruitment)
  A.T.C. (Recruitment)
  RAW COTTON SALES (GOVERNMENT LOSSES)
  RAW COTTON SALES (GOVERNMENT LOSSES)
  ROADS (WAR DAMAGE REPAIRS)
  ROADS (WAR DAMAGE REPAIRS)
  GOLD COAST (LIQUOR IMPORTS)
  GOLD COAST (LIQUOR IMPORTS)
FOOD SUPPLIES
  National Loaf (Vitamin Content)
  National Loaf (Vitamin Content)
  Cabbages
  Cabbages
  CYPRUS (SIR C. PARKINSON'S VISIT)
  CYPRUS (SIR C. PARKINSON'S VISIT)
  TRINIDAD (CARONI SWAMP)
  TRINIDAD (CARONI SWAMP)
  BELGIUM (CIVILIAN MAIL)
  BELGIUM (CIVILIAN MAIL)
  MALTA (POST-WAR EMIGRATION)
  MALTA (POST-WAR EMIGRATION)
  COLONIAL SERVICE (LEAVE)
  COLONIAL SERVICE (LEAVE)
  BRITISH COLONIES, PROTECTORATES, ETC. (LOCAL LEGISLATURES)
  BRITISH COLONIES, PROTECTORATES, ETC. (LOCAL LEGISLATURES)
  CENTRAL AFRICA (PROPOSED STANDING COUNCIL)
  CENTRAL AFRICA (PROPOSED STANDING COUNCIL)
  INCOME TAX (HOUSEKEEPER ALLOWANCE)
  INCOME TAX (HOUSEKEEPER ALLOWANCE)
  SERVICE PAY AND ALLOWANCES
  SERVICE PAY AND ALLOWANCES
  EDUCATION (WELSH SHORTHAND)
  EDUCATION (WELSH SHORTHAND)
  PENSIONS AND GRANTS
  PENSIONS AND GRANTS
  NETTLES (DESTRUCTION)
  NETTLES (DESTRUCTION)
TRADE AND COMMERCE
  Industries (Location)
  Industries (Location)
  Towels
  Towels
Preamble
The House met at two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.

  ADEN COLONY (AMENDMENT) ORDER, 1944:
  MESSAGE FROM THE KING.
  THE EARL OF CLARENDON: My Lords, I have to convey to the House the following Message from The King, signed with his own hand:
  "I have received your Address praying that the Aden Colony (Amendment) Order, 1944, be made in the form of the draft laid before your Lordships' House. I will comply with your request."

THE LATE LORD DAVIES.
THE LORD CHANCELLOR (VISCOUNT SIMON): My Lords, in the enforced absence of the Leader of the House, I have to make one of those melancholy intimations which always move your Lordships. I regret to announce the death in action of Major Lord Davies. I am sure your Lordships will join with me in expressing sympathy with his relatives.
DIPLOMATIC PRIVILEGES (EXTENSION) BILL. [H.L.]
Returned from the Commons agreed to, with Amendments.

WAR AND POST-WAR COMMITMENTS.
2.10 p.m.
LORD TEVIOT LORD TEVIOT rose to call attention to the approximate cost of the war and the post-war financial and other commitments; also to examine likely methods of meeting this expenditure; and to move for Papers. The noble Lord said: My Lords, it is my custom when addressing your Lordships' House to be as short as possible and to mention as few figures as possible, but I am afraid on this occasion
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I am going to be longer than usual and I hope your Lordships will bear with me. I am also afraid that in order to advance my arguments I shall have to mention quite a number of figures. The object of my Motion is to face up to the realities of the situation as I see them. This is a big subject and a complicated subject, but I feel very strongly that discussion of it in your Lordships' House will help in its consideration. It should be a completely non-political subject. My great anxiety is that we seem to-day to be taking steps to spend a great deal of money without realizing the necessity of making the money in order to be able to spend it. I can quite understand an outsider, not very familiar with the world's affairs, saying: "Well, these people must have been having a great time of prosperity and are now cashing in on the profits." My view, however, is that never in our history have we been in such a critical and difficult time. My anxiety is lest all the sacrifices, the toil and the sweat undergone so splendidly by our people during the war will have gone for nothing and that we shall not be able to carry on as we would wish to do in peacetime.
I believe we should tell the people everything. I was told not very long ago by one of our most successful Generals that now, before a battle, they told the men everything so that a man went over the top knowing exactly what was going to happen, knowing of the strategy and the tactics that were being employed. I believe we ought to take the people into our confidence in regard to the difficulties of the future because I think, no matter how great those difficulties may be, the people will stand up to them and face them. But I am very apprehensive about not telling them everything. In studying the position I have come across some astonishing figures which I for one had no idea of previously. Let me take a sample. In 1914 we had a population, roughly speaking, of 38,000,000 in this country. The National Internal Debt at that time was £656,000,000. If I am right in my arithmetic the burden per head of population at that time was £17 To-day, in 1944, we have a National Debt of certainly £23,000,000,000 and possibly more, with a population of 45,000,000. I work that out roughly as a burden of £500 per head of population. That is an

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enormous jump and it seems to me that that ultimately must be a burden on industry In 1919, after the last war, our Internal Debt was £4,823,000,000 and at the beginning of this war it was £7,400 000,000. It is interesting to note that at that time our National Debt was practically the same as that of the United States of America with three times our population and three times our annual capacity.
I ash your Lordships to remember that plain situation in order that we may face up to the realities of our position to-day. In September of this year our National Internal Debt was £20,000,000,000 and Lord Keynes has told us that we have external liabilities to the amount of £3,000,000,000 which will probably rise to £4,000,000,000. I do not know what your Lordships think about it, but there we have the figure of £23,000,000,000 to £24,000,000,000 and before we are out of this war it may be that the National Debt will be somewhere in the region of £30,000,000,000. This colossal debt is bound, I think, to be a burden on industry no matter what economic experts say about it. My Motion is somewhat of a second edition to that very line Motion put down by my noble friend Lord Glasgow of last July. Unfortunately I was not able to be here then, but I have read some very admirable speeches that were made. Since that date the military situation has gone tremendously in our favour and what in those days I might describe as anxious speculations regarding the future have now become grave anxieties of to-day.
I am going to take as my starting point this—I wonder what my noble friend Lord Southwood will say to it—that war destroys wealth and therefore a nation is left poorer after a war than before it. There are two results: first, the destruction of existing wealth in the shape of houses, factories, shops, docks, railways and so on; and secondly, a diminishing production and accumulation of new wealth in those peace-time forms which give life its necessities, comforts, amenities and luxuries. That is the effect of war as I see it. In addition to this we have an appalling destruction of human life. I do not think that we can measure what fiat means to us in the economic sense, but it must mean a tremendous loss. We must not forget that as a result of all this the nation must be poorer.
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In my view, if we do not realize that, and tell our people that, we shall be committing a grave social sin in deceiving our people. Hitler built up a dream world to delude the Germans and the result is now clear. It may be said that the Germans liked to be deluded and should bear the consequences. I agree, but I am very anxious that our people shall not suffer the same experience.
In the spring of 1943 there were three important social factors: first, the physical volume of output of British industry; secondly, the average weekly earnings of our workers; and thirdly, the aggregate amount of small savings, naturally mostly the savings of our workers. Asfar as statistics go 1943 was a year of abounding prosperity. The worker had never been so well off. Yet with all this wealth he did not find it very easy to come by a substantial meal when he went out for the day, and when he wanted to buy for himself and his family some new clothes and boots he had the money all right but perhaps he had not, and generally he had not, the coupons. So you have this extraordinary situation of great wealth and poverty mixed up together. In the White Paper on the "Sources of War Finance," I find from pages 18 and 19 that our national income is just under £8,200,000,000. That is all that the nation has to spend. We often hear people say: "Oh, let the Government pay, let the Treasury pay." But the Government and the Treasury have no money whatsoever except what they get from the national income; that is to say, out of the taxpayers. I do not think we can rub that in too much.
It was admirably expressed the other day in another place by my right honourable friend Mr. Ralph Assheton, the Financial Secretary to the Treasury. In 1943 the personal expenditure on consumption at market prices was just under £5,000,000,000. Public expenditure at home and abroad was £5,200,000,000. We are left therefore with this position, that with income £8,200,000,000 and total expenditure £10,200,000,000, there was a deficit of £2,000,000,000. This has been made up by borrowing which has been of two sorts, by making use of pre-war savings abroad and, in so far as this has not sufficed, by creating and borrowing a large new amount of banking credit. Here is the source of employment in war years.

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It is really employment financed out of income plus capital. In the White Paper I find that in 1938 our income was £4,600,000,000 and personal expenditure £4,100,000,000; that is, exactly 90 per cent., or shall we say 18s. in the pound. In 1943 our personal expenditure was 6o per cent. or 125. in the pound. Some people say that the drastic curtailment of necessities, comforts and amenities can be continued without difficulty. I profoundly dissent. I need only rely on the evidence of my own eyes. I see queues outside shops and inside a supply of goods that is very meagre indeed. It is common knowledge that war produces full employment at high wages. Unfortunately it is not common knowledge that those things that can be done during the war cannot be done in peace-time without leading the people into a fool's paradise, from whence they will be very drastically expelled. That is what I am frightened of, and in my view this sort of finance must stop.
It cannot go on, but we are told by some that it is to go on. Sir William Beveridge now—fortunately, I think—sitting in another place was reported in The Times on September 28 as saying at Southampton that after the war we must make a new Britain free of social evils without regard to money costs. My fear is that this new Britain will very likely be a bankrupt Britain. I am not an economist, and I have no out-of-date theories. I content myself with up-to-date theories. When I see politicians chucking about thousands of millions as if they were like, we may say, tennis balls, I think it is high time to ask His Majesty's Government to tell us within a reasonable margin for uncertainties how many thousands of millions they propose to call on the taxpayers to provide in the earlier years of the coming peace. When I say "taxpayers" that term means everyone—not only those who are drawing incomes from securities, but the wage earners and everybody else in the country. In July last my noble friend Lord Southwood seemed to be a little indignant with my noble friend the Earl of Glasgow for saying that this country would be poorer after the war than before it. He did not quite say that the country would be richer, but he did say that it would be potentially richer. I am looking forward to hearing the noble Lord tell us—and I hope that he will join in the debate
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to-day—where he gets his potentiality. I have tried very hard to find it, and if he can show that I am wrong and he is right nobody will be more pleased than I shall be. I might answer him with a debating point to the effect that I am not so much looking for potential riches; what I am looking for is present riches measured in pounds, shillings and pence, and capable of transference to the Chancellor of the Exchequer. I prefer to examine the grounds on which it seems to me that the noble Lord based his argument.
They are simple, and simply stated. It is taken for granted, so far as I can see—I am delighted to see the noble Lord smiling because I am hoping that he is going to come back at me on this —that British industry having done what it has done for the purpose of winning the war, can do the same thing for the purpose of winning the peace and even improve on the figure achieved. No one has more pride than I have in the industrial record of the country. I saw, in the long journey that I took some two years ago, every evidence of the colossal war effort of our people. There has been nothing finer in our history. But I am surprised that the noble Lord should really and genuinely feel—it certainly appeared to me that he did—that we can carry on after the war as we have done during the war. No two markets can possibly be more different than the market in the war and the market after the war. In the one case we have a single buyer with an imperative demand and a bottomless purse. In the other case we have many different customers with multitudinous demands, and, moreover, a limited purchasing power, and we are competing with other nations in the markets of the world. Is there anything in regard to business which can be more different than those two things? The industrial result now described by the catch-phrase, if I may so put it, of full employment was reached over and over again before the first world war. And I confidently hope that it will again be reached after this war. But it will only be reached in the same way because there is no other way. That way is turning out goods that the rest of the world and our own people need at prices they can afford to pay. That is the only possible way.
We have a wonderful ability in this country—I do not say the power, and I

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do not say the will for we have both—but that ability depends closely on the post-war demands of the Chancellor of the Exchequer to finance post-war policies of the Government. It is quite plain—I feel sure that I shall rot be contradicted upon this—that the same cheque or bank note cannot do two things. It can help to meet the demands of the Chancellor of the Exchequer, or it may go to Industry. It cannot do both, and no socializing schemes can make it do both. The importance of money in this national industrial system was very well set out the other day, I thought, in the Economist. I quote from that paper:
"In a modern community, those who save do so it money, and the largely different set of persons who place the orders for the capital goods have to possess themselves, by some means or other, of the money necessary to cover the cost of those capital goods. The first question to be asked is, therefore, is there at adequate supply of money?"
My Lords, £s. d. are not meaningless symbols as Mr. Arthur Greenwood deemed. They are the motive power of the industrial machine.
The question as to how much money will be available after the war is not a question of an economist juggling with out-of-date theory, but the most practical of all questions demanding an answer on the threshold of the post-war world. I notice, with some amusement, that the node Lord opposite is smiling at my humble remarks. I only hope that, perhaps, they will get dealt with in detail afterwards. To answer the question precisely will riot be possible until we get the last White Paper on the Sources of War Finance, followed by the first White Paper on the Sources of Peace Finance. We can get only a rough idea of how much is likely to be in the kitty, so to speak, after making certain reasonable assumptions. Naturally, I do not expect an exact answer as to what the Chancellor of the Exchequer is going to take out of it, but it is necessary that industrialists should have a clear notion of where they stand.
The first subject of speculation is the amount of the annual national income after the war, since this is the source, and the only source, of all private and public expenditure, and cannot be exceeded by the Government without borrowing; and borrowing cannot go on indefinitely. I am afraid that I have to get back to figures again. The national income in
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1943 was, as I have said, roughly £8,300,000,000, and for the four years 1940 to 1943 inclusive averaged £7,500,000,000. Let us remember that in 1938 the national income was £4,600,000,000. That was the last more or less normal year. I have given some attention to this subject and have taken the advice of various people whose judgment I respect. I am told that I may be putting it too high, but, in order not to overstate my case, I will take the national income for the four years after the war began as being roughly £7,000,000,000 per annum. It may be a great deal less.
I venture to remind your Lordships that this is the aggregate of all personal, private and earned incomes and includes all wages, salaries and so on. I admit that these figures are dull and difficult to remember, but from the figures which I have quoted it will be seen that in 1938 90 per cent. of the annual income was spent on consumption goods and services at market prices, whereas the proportion in 1943 was as low as 6o per cent.—that is, a difference between 18s. in the pound and 12s. in the pound. Unless we imitate the attitude of Hitler in Germany before the war, there will be a marked difference here. Hitler's slogan was "Guns, not butter." Are we to substitute for it "Social security, not beef and beer"? That is the sort of question with which we are faced. No one wants a better Britain after the war more than I do. The noble Lord, Lord Woolton, referred to social stability in the debate last July, when he said that it was the foundation of a better Britain; but social stability will not be secured by enforcing in peacetime all the avoidable privations of war. I do not wish to see our people slaving in order that we shall spend more than we can afford.
I assume that these serious considerations will be borne in mind by the Government and will have their effect on policy, with the result that our people will be permitted to spend, say, 75 per cent. of the national income on the consumption of the things which they like to consume. This is a half-way house between 1938 and 1943, and would absorb £5,250,000,000 of the national income of £7,000,000,000. I call special attention to these figures, though I apologize for giving them. The total national income I estimate as £7,000,000,000, with an expenditure on personal consumption of £5,250,000,000.

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These master items have to be examined in connexion with the inevitable necessity of reducing war-time taxation as soon as the war ends, which the Chancellor of the Exchequer has stated must be done. It is true that these two amounts are estimates, but they are the best which I can deduce for the early post-war years from the 1943 figures.
The figure of £5,250,000,000 for the aggregate of personal expenditure on consumption at market prices includes postwar indirect taxation. This branch of our twofold system of taxation has grown enormously during the war. In 1939 the shadow of war was darkening the sky and I do not look upon the Budget of that year as a normal one, but indirect taxation was estimated to bring in £349,000,000 in that year. The estimate in this year's Budget is £1,038,000,000, a growth of £689,000,000. Indirect taxation now amounts to an average of nearly £100 per family per annum. It will be economically necessary to reduce this tremendous burden in order to release the volume of purchasing-power necessary to maximize employment. I think it was Mr. Gladstone who said many years ago that the more you leave in the taxpayers' pockets the more prosperous the country will be, bearing in mind that 90 per cent. of the goods made in this country are consumed in this country. I assume, therefore, that the current burden of £1,038,000,000 is rapidly reduced after the war, let us say to £700,000,000. Even then it will be just double what it was in 1938.
I now turn to the difference between £7,000,000,000 and £5,250,000,000, or £1,750,000,000. This brings me, curiously enough, to within £250,000,000 of the Chancellor of the Exchequer's estimate for this year, which I think was £2,000,000,000. This £1,750,000,000 has to provide, after the war, not only all direct taxation but all the expenditures of our people who are not paying direct taxation, and I should say that this is a fairly useful yardstick for measuring what it is possible for the Government to do after the war in spending public money. In July last my noble friend Lord South-wood expressed the view that the Government would be required after the war to spend not less than £1,200,000,000 more than in 1938. In the financial year 1938–39 the Government spent
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£927,000,000. The noble Lord shakes his head. I will of course bow to him if I am wrong but I took this out of Hansard. In 1938–39, as I say, the Government spent £927,000,000. Add to this the noble Lord's £1,200,000,000 and you get over £2,100,000,000. The Chancellor of the Exchequer will get £700,000,000 of this from indirect taxation; this leaves £1,400,000,000 to be got from direct taxation in order to reach a balanced Budget, as contemplated by the noble Lord. This leaves £350,000,000 to provide for all the expenditures of the people other than those who pay no direct taxation, which expenditures are on this analogy to be left after the war at their maximum war-time level.
It seems to me that social stability, referred to by the noble Lord, Lord Woolton, is in jeopardy here. He described social stability as a foundation stone of post-war recovery and reconstruction, but there is a snag here. In 1943 the Chancellor of the Exchequer owed to the Income Taxpayers a sum of £305,000,000 in the shape of Income Tax paid during the war to be refunded after the war. I think it is a reasonable estimate to say that this amounts to £400,000,000 now. Is this sum, owing to the taxpayer, to remain unpaid because war-time Income Tax is said to be required for post-war policies? If that is so, social stability, instead of being secure, seems to me to be very severely jeopardized. And in view of what I have said people cannot be permitted to eat their cake and have it; that seems to me to be the point. Our industrialists are feeling, and have in fact expressed, the very urgent need for a broad outline of post-war Government policy, indicating the expenditures proposed to be allocated to them and the sources from which these expenditures are likely to be met. I hold it to be wrong, very wrong, to keep industrialists in the dark. While I do not expect that we shall do away with the black-out altogether—the position is difficult and very obscure—I would like to see a bit of a dim-out on this question. It is a most urgent need in regard to the preparation for the future. I think it ought to be estimated with reasonable accuracy, and I hope that we may hear something about it to-day.
Then there is another thing that disturbs a great many people. The

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whole of the future in regard to Government expenditure is based on the national income. We know that that has got to fall. As in the past, probably it will be a fluctuating income, yet here we are making ourselves responsible in the future for immense sums for all time. That is the worry of a great many people. Many of these items of expenditure no doubt do not amount to many hundreds of minions, but take the retirement pensions alone. Under the social security scheme they are to cost £160,000,000 in 1945; but the estimated cost in 1975 is £324,000,000. You may think that I am looking rather a long way ahead as many of us will not be here then, but I think that at a moment in our history like this we have to look ahead a long way and that £324,000,000 is twice as much as the estimate for this item next year. So that if this one item has to remain a constant percentage of our national income it seems to me that our national income in 1975 will have to be double what it is in the early postwar years. But unfortunately it may not turn out to be true; it may be that I am too optimistic. In 1940 the figure was dust under £6,000,000,000; in 1938 it was as low as £4,000,000,000 and it may be that my noble friend Lord Woolten had this same dubiety in his mind when he recently said this:
"We must avoid the creation of a state of affairs in which the overhead charges for getting ideal conditions are such as to prove beyond the earning capacity of the country."
These are striking words, and it is a tremendous pity that they passed almost unheard and unheeded, simply because they do not chime in, as I see it, with the extravagant assertions of our so-called advanced thinkers. I noticed in the Press only yesterday that a very eminent member of the Socialist Party sounded a note of warning in a speech he made. I refer to the speech of Mr. Shinwcll—a very sound and very wise speech.
It is true that we must put down the Government's claims as the first charge on the national income, but there are other charges. Among these is the vital annual charge which will be required re-equip British industry, to make it capable of producing the nation's income required for all these vast purposes. This efficiency can only be produced by vast expenditure of money capital on more and better
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capital in the shape of materials, tools, machinery, power, ships and buildings; in short, doing again for the purposes of peace what had to be done for the purposes of war, but the money going into industry. A most important illustration of this comes to one's mind. In September no doubt your Lordships noticed that the President of the Board of Trade called on the Lancashire cotton industry to set about making a radical readjustment for its post-war operations, but the industry itself, in a joint statement representing all the interests involved, had some months before issued a report having the same end in view. One of the things set out therein was that they would require £40,000,000 worth of new and improved machinery to enable them to do this very thing. Forty millions! What is £40,000,000? It takes a lot of finding. One looks hack and realizes the difficulties that are before us. It is not as a Scotsman or, in a humble way, a banker that I look upon this question of finding these great sums to re-equip our industry. It is something we have got to bear in mind, for it means the one thing on which these Social Services are built. Sir William Beveridge says that this cannot happen without full employment. That means the re-equipment of industry. I am very anxious to see some way by which this enormous amount of money can be found in view of the great sums the Government require to find.
I am sorry to be so long; I am nearing the end now. It is the basis of my appeal that at the present time, from the information I have from all over the country, there is a sort of industrial darkness, and I believe the Government should do something at once to state as accurately as possible the post-war claims they intend to make on the resources of our people. I have said that I put the national income at £7,000,000,000 after the war. I ask what is the Chancellor of the Exchequer going to take out of that for his own purposes. In 1938 he took 20 per cent., in 1943 he took 37 per cent. I give him 30 per cent. for his post-war purposes, with the warning that any long continuance of this high percentage will be economically dangerous and socially perilous. Thirty per cent. Of £7,000,000,000 is £2,100,000,000. Service of the Social and Civil Services will cost about—I am trying not to overstate the matter—

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£500,000,000. Service of the National Debt at the level reached at the end of the war I put at, roughly speaking, £600,000,000. These two items equal £1 100,000,000. Then I must take into account what the Chancellor of the Exchequer is going to refund to the tax-payers. I have put that at, roughly speaking, £400,000,000. Twenty per cent. of the E.P.T. is to be refunded, but 10s. in the pound will be deducted as unpaid Income Tax. I put the total refundable at £200,000,000, making £600,000,000 in all. I assume that, adopting the practice familiar to most people, he will pay this debt by instalments spread over, say, four years—£150,000,000 per annum.
Out of this £750,000,000, the Chancellor of the Exchequer will have to provide, first, the cost of the Armed Forces, secondly, the cost of war pensions and gratuities, thirdly, this country's share of the cost of the occupation of Germany, fourthly, the Treasury's share of the cost of repairing war-time damage, fifthly, the Treasury's share of the increased cost of Social Services, including education, and, sixthly, all subsidies to keep the cost of living index as low and stable as possible—a very formidable list. In fact it is a list from which I shrink. This £750,000,000 will melt away like snow in the sun with this burden upon it. It is because of my own efforts to look into the post-war financial position, which have given such disturbing results, that I appeal to the noble Viscount who is to reply to tell us what we can do in the very serious condition in which we find ourselves. As I have already said, let us tell the people what the true position is, and they will stand up to it, but do not let us go about the country telling them they are going to have this wonderful new world to live in. I hope it will happen. I hope that noble Lords opposite who believe it will happen will tell us how it is to be done. It may happen; but in my view it will not happen for many a year. We have got to go ahead very cautiously, to economize all we can, to spend wisely and never unnecessarily, and no more than we can afford. If we do otherwise we may injure our people and bring grievous suffering to them.
We must face up to the realities of the position. As I read some of the speeches,
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they are just humbugging our people who have not got the figures before them. In the middle of it all, please God, we shall be able to keep our people employed, properly housed, properly clothed, and well fed, but vague perorations about potential wealth are merely in my view—I hope the noble Lord will forgive me—mischief-making. Practical advice on statesmanlike lines as to how we are to recover from our losses in the war is what we want, and public exposition of sound policy as to how it should be done. In conclusion let me say this. I apologize for keeping your Lordships so long and for having mentioned so many figures. I only hope I have been lucid enough to get my point of view over. I beg the Government to come out and give a clear and lucid picture of our difficulties as they can, and I believe, as our great people responded in war, so they will respond in peace. I beg to move for Papers.
3.10 p.m.
LORD SOUTHWOOD: My Lords, I hope that the noble Lord, Lord Teviot, will forgive me if I say with great respect that I think this House has seldom listened to a speech which will spread more gloom than the speech he has delivered here this afternoon. So far as I can see from what the noble Lord said, we are at the edge of a financial abyss and that the only thing we can do now is almost to abandon hope. Let us see if that is the position. The noble Lord challenges the claims I made in my speech in this House in July last. I do not propose to go over all the ground again. I tried then to make my case quite clear. I will, however, endeavour to allay his fears as to the country's post-war financial stability, and that I take it is what the noble Lord wishes.
Let us look at the position. The noble Lord takes exception to my claim that this war will leave us not poorer but potentially richer. First of all, is not the short answer to be found in the speech of the Governor of the Bank of England at the Mansion House luncheon, only a week or two ago? Having mentioned our heavy post-war burdens, Lord Catto added these significant words:
"But the productive capacity of the country and, therefore, the national income have also very substantially increased since the end of the last war."

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I am sure the noble Lord will not challenge Lord Catto's authority.
This increase in productive capacity has gone on at a tremendous pace, especially during the present war. Mr. Oliver Lyttelton has said that, under the stimulus of war, the output per head in the aircraft .industry has been rising at the rate of 2 per cent. per month against an average of about 1½ per cent, per annum for general engineering before the war. Even allowing for the wide differences between war conditions and those of peace it is, I am sure, quite safe to say that we may look forward to greatly increased productive capacity after tae war. During this war new discoveries and inventions have become great commercial possibilities. The use of photo-electric cells and X-rays, the application of high speed tool steel, improvements in factory lay-out, in jigging and tooling, in standardization, in simplification and so on have made enormous advances. These and other factors have so augmented our power to produce that there can be no question of post-war privation or scarcity if only we will harmonize finance with technology.
As a practical contribution to the debate, should like to offer a few suggestions for improving financial technique in the light of our post-war Budget responsibilities. First, I plead that the Government should lose no time in establishing the National Statistical Office, quite independent of Party politics, to ascertain and publish at intervals the facts concerning our capacity to increase production. These facts should be used as a basis for estimates of capital development. Our prime necessity is, of course, to avert inflation. The correct approach is not so much to stabilize the exchange value of sterling but to safeguard its purchasing power in our biggest market—,the home market. After the last war we first permitted prices to soar, and then, after 1920, we allowed them to fall catastrophically with the effect of increasing the real burden of all fixed charges. I suggest that this time we must avoid inflation and deflation alike, and the more urgent reed of the moment is to avoid inflation.
First, the cost of living must not be allowed to rise. We must give our work-people confidence in sterling. We must see that their wages buy as much as
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possible. This means something more than avoiding the premature abandonment of rationing and price control. It means we must continue to stabilize the cost of living at round about 3o per cent. over that of 1938, as it is at present. Many of us were very disturbed at the Chancellor's statement in his Budget speech that he could no longer regard that figure as sacrosanct. He said costs were rising. Now, with the European war nearing its end and with technological development transforming our factories, we should certainly not accept the inevitability of rising costs. Efficiency and far-seeing management is the answer. To reduce the present subsidies—even to refrain, if necessary from augmenting them —is to provoke wage disputes which of course we all desire to avoid. More than anything, rising prices destroy work-people's confidence. When they find the pay packet does not buy as much as it did they naturally want higher wages. And that brings me to the Purchase Tax. There is, of course, no sense whatever in keeping down the cost of living with subsidies while driving it up with a Purchase Tax. After the transition from war to peace, the Purchase Tax will have outlived its usefulness, which is to curb civilian consumption at a time when production has to be concentrated on munitions. The Purchase Tax can have no place in post-war Budgets.
And there are other and powerful reasons why we should stabilize the currency with cost-of-living subsidies. For five years we have been inducing people to buy war loan on patriotic grounds and the response, I am sure your Lordships will agree, has been truly remarkable. The time is near when many of these people will have to sell their war loan to renew their domestic equipment. They are surely entitled to expect that the Government has done everything to maintain the purchasing power of their money. But that expectation will be sadly disappointed if the cost of living is allowed to rise above its present level. The House will remember that the Prime Minister in his broadcast of March, 1943, referred to the "sacredness" of the savings of the people, and insisted that over a period of ten or fifteen years there ought to be a steady continuity of values. We must not forget, too, that the Government have just published, and presumably intend to enact, a social security plan based on

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fixed contributions and benefits with no provision for variation to meet cost-of-living changes. To enact such a scheme, and then to whittle down its benefits by letting prices rise, would be a betrayal of all that social security means. I submit, also, that the Government should state more clearly than is conveyed in the White Paper on Employment Policy that monopolists will not be free to make their own price-fixing arrangements. The interests of the consumer must be safeguarded.
Now, my next suggestions are designed to safeguard the taxpayers. Budgetary practice ought to distinguish between capital expenditure and current expenditure. A very simple test would be to regard as capital outlay that which, if financed by a private firm, would be treated as a capital charge and not as a running expense. I submit that we should follow the example of Sweden and present two separate Budgets yearly: a current Budget to be financed out of revenue and a Capital Budget to be financed out of loans. Roads, schools, housing, afforestation provide examples of what should legitimately be financed out of loan, not out of taxes. This Capital Budget will necessitate up-to-date statistics, which reinforces my plea for a National Statistical Office. Given the needful administrative changes, we should be able so to arrange that, at any time, when the volume of private trading shows signs of falling off, employment could to a considerable extent be maintained through expansion of State investment in useful public works.
National debt is not in itself an evil so long as it is covered by assets which make possible an increase in national income. Nor need all the assets be revenue-producing: roads, for instance, produce no direct revenue but indirectly they increase the nation's efficiency and therefore augment its capacity for production. Nor need national debt destroy confidence, even though it be so large that any practicable sinking fund would make no appreciable impression on it in the lifetime of any of us or our children. Our Victorian forbears, whose Budgets were 'prepared by financial purists like Mr. Gladstone, made no serious attempt, with their puny sinking funds, to pay off
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debt, which they could easily have done if they had been so minded. The £850,000,000 debt of 1817 was still £650,000,000 nearly a hundred years later. When we entered the last war, we were still paying for the battle of Waterloo! Obviously confidence had not been destroyed! Before I leave this question of debt, I want to say that I hope we are very close to the time when the Government will not have to tie up any more of the people's money in loans that represent only the means of destruction by war.
We all, of course, realize that money will be needed to finance not only the raising of the standard of living of the poorer classes, but also for capital extension by businesses large and small. I am not seeking to convey the impression that the State can do everything—not at all; but I do suggest that the policy should be to leave both businesses and individuals with enough money to finance their requirements for necessary equipment as soon as the goods become available, subject, of course, to such control as the circumstances of the time may dictate. The noble Lord has been telling us a lot about our National Debt. Our total National Debt of nearly £20,000,000,000 on March 31 last, as shown in the last Budget, included nearly £5,000,000,000 of floating debt, comprising Treasury Deposits by Banks, Treasury Bills and Ways and Means advances. It was money—I quote from The Times of September 3o, 1942—
"created by the banks by the simple process of taking up Treasury Bills or Bonds and crediting the Government with the corresponding amount. Practically all the floating dent"—
I am still quoting from The Times—
"and a certain amount of the funded debt consists of new money created by the act of lending."
That is the end of my quotation from The Times.
The position therefore is that the banks are deriving interest at 1⅛ per cent. per annum from loans which, as The Times made clear, represent only book entries. But the position is very different when you proceed to fund this sort of loan. You collect the money from the public by borrowing it, and you pay the money to the banks, who use it to cancel Treasury Bills and so on—which is quite right and proper. That is the end of the

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transaction, so far as the banks are concerned. But it is not the end so far as the Government are concerned—not for many generations. The public, having parted with its cash, expects interest, not at 1⅛ per cent. but at more like 3 per cent. The floating debt of £5,000,000,000 at 1⅛ per cent. interest costs the taxpayer some £56,000,000 a year in interest charges; but the same amount of funded debt at 3 per cent. interest costs the taxpayer £150,000,000 a year in interest charges (less, of course, Income Tax). So, there is an annual inflated charge of £94,000,000 with no tangible assets to set against it. I submit that, now the war is near its end and the investment market will be in great need of money for peace-time development, the Government should allow this floating debt to remain floating; thereby not only relieving the burden of taxation, but also avoiding imposing a strain on the capital market, the full resources of which will be needed for financing national development. Let the floating debt continue to float and not be funded. When the transition period is over, we shall not need any more huge war loans or victory loans to drain away money from the consuming market or the investment market. The only Government loans we shall, I hope, need then will be those for social betterment.
And now I turn to the thorny topic of German reparations, on which I would only say that we must avoid the error into which we fell last time—when the reparation goods created unemployment by competing with British industry. Reparation ships and reparation coal were cases in point. Suppose we take, say, £50,000,000 worth of German reparation goods in a year and proceed to sell them on Government account in the British market, Obviously we shall divert £50,000,000 of British purchasing power from British goods; British trade will be hit to that extent. The way to avoid that undesirable consequence—I dare say it will be disputed by many—is for the Chancellor of the Exchequer to increase the spending power of the people by the £50,000,000, through reducing Income Tax to that extent.
Finally, I come to the international aspect of the post-war financial position. Fears lave been expressed concerning the possible consequences of our Government adopting some such scheme as that pro-
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posed at Bretton Woods. On this I would only say that if, as I have advocated, we stabilize the cost of living in this country, and at the same time insist on a policy of employing our productive resources fully, we need have no fear that the pound sterling will ever depreciate in any sense that really matters. No currency can possibly depreciate so long as its purchasing power in the home market is assured. There is, however, one aspect of international monetary cooperation on which we on these Benches rest high hopes. It concerns capital investment in backward industrial countries. We should like to see the advanced industrial nations get together and agree on a concerted move to develop the producing power of the backward countries. Such a move would not only provide work for the factories of countries like our own, making capital goods for export, but also increase our national income and reduce, as a consequence, the burdens of our debt obligations and social commitments. It would also enrich mankind through augmenting the world's total production, and it would certainly improve international relations through raising the standard of living in less fortunate lands. I must not keep your Lordships longer as there are many speakers to follow me.
These, my Lords, are but a few suggestions to meet the heavy commitments the war has brought upon us. If adopted, they would, I am sure, not only meet these liabilities but leave ample margin for the social security legislation to which the Government are committed. I submit that there is no need for pessimism. The people of this country will never submit to going back to the pre-war days of slumps and booms—unemployment and the "dole"—nor, with our increased productive capacity and the rapid march of science, is there any need to do so. In spite of all the noble Lord has said, I am still unrepentant! I repeat that if after the war the plans I have outlined are skilfully handled, the country will be not poorer but potentially richer.
3.30 p.m.
LORD MOTTISTONE: My Lords, we have listened to two extraordinarily interesting speeches. My contribution is on somewhat different lines. I think it was Mr. Asquith who referred to a speech in the House of Commons as "filled with inspissated gloom," and I think we can

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almost describe my noble friend Lord Teviot's speech in those words. And that is all the more serious because while Lord Southwood, as we know from what he said, is an optimist, Lord Teviot we know is a man of quite remarkable and outstanding courage, as his record shows. What are we to do when a man so courageous views the future with so much alarm? I would say this. The truth lies, as always, between the two extremes. I can give some reasons for bringing comfort to the wounded soul of Lord Teviot, for bringing another ray of sunshine into this gloom.
All that Lord Teviot said in the way of facts and figures I understand to be perfectly sound and true. The remedies which Lord Southwood suggested may not fill the gap because a nation is exactly like an individual: if it persistently overspends it goes bankrupt and sinks into the position that bankrupts reach in a country like ours. As we know, they are often to be seen walking about without any soles to their boots. We cannot afford to run any risks of getting into that position, for the obvious reason that we depend entirely for any of the assets to which Lord Southwood referred, and which we all know to exist, on the valour of the men who are fighting our battles overseas. If we were to lose this war practically all our assets would vanish. If we win it, I believe that we can win through, and that we shall be able to afford some measure—I hope the full measure—of such munificent things as the Beveridge Report. I believe it to be possible, but, of course, it is obvious that everybody has got to try his hardest. If we were to fail to try our hardest then we should rightly be judged as traitors to those who are fighting so valiantly for us.
If by any sloth or indolence on our part we were to allow things to slide by saying: "Oh it will be all right on the night; we will vote the money all right and it will come along all right;" that would be very wrong. There is nobody on these Benches, or indeed in any quarter of the House, who would dream of doing such a thing consciously. But there is a danger; it is no use pretending that there is not. I quite agree with Lord Southwood that we shall weather the storm, but in order to do that it is obvious that we must have with us in these days the people of the
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country as a whole. If they do not agree with the plans Parliament proposes and the Government of the day bring forward, and they go the extreme, either from panic or from a wild spirit of recklessness; if they do not follow the advice of the Government, whatever the complexion of the Government may be—and here may I say that we have seen in this debate how completely remote from all Party divisions are these questions which we are discussing to-day—if the people do not play up, we are sunk, we are doomed, without a shadow of doubt, as so many countries have been doomed.
In this connexion I would cite the example of Paraguay, a tiny country which completely disappeared, as a community of human beings as we know it. The people of Paraguay went to war, they went on fighting and they went on borrowing money, until, finally, their wretched country, which before had been a nice-seeming place, was just a desert inhabited by people to be accounted as little different from the beasts of the field. That description I take from the words of one of the people of Paraguay. But that kind of thing cannot happen here for a reason which I am shortly going to give. The moral of the whole business is that you must take people into your confidence, as Lord Teviot said. You must tell them how matters stand, tell them that all the reservoirs of wealth that existed before have now nearly run dry, and that the figures given by the Chancellor of the Exchequer show conclusively that there is no more big reservoir to be tapped. You must make them understand that they have got to make up their minds, that they have got to decide whether they will pay for social reform or spend the money and "go bust." They can decide and they will.
Why did these many countries to which I have referred, go under? It was because all the money was concentrated in comparatively few hands. What has happened in our country to give us heart of grace for the future is most surprising. During the eighteen years that I have been connected with the National Savings Movement—and I need hardly say that I am pleading on its behalf now—I have learnt how to get statistics from the Department concerned, and I have some here which will astonish your Lordships. How far has it gone, this spreading of

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the consciousness of an interest in the country, of what used to be called—it was an expression used by Mr. Gladstone —a stake in the country? As Lord Addison will well remember, at the time of the End of the last war we were faced with the same problem of how much we could afford to spend on social reform without danger of repudiation or inflation.
Here are some simple figures relating to the small savings of the people. I believe, that the conclusion to be derived from them is most surprising. On December 31, 1918, just after the last war, there were £734,000,000 in small savings—a big sum. To-day, in these same categories there are £4,500,000,000. In that short space of time the figure has multiplied more than six times. Now let us take the amount of savings per household. That too is a very surprising figure. Of course, it is difficult to get it, quite right because of Eire Ireland always provided a puzzle for the statistician and always will, but sally very little difference is made by either excluding or including Eire. At the end of the last war, on an average, the amount invested by the small investor in Government securities calculated on a household basis, was £65 per household. To-day the figure is £380 for every household. That, as I say, represents money invested in Government securities. I leave out all questions of building society money, trade union funds, and so on, which amount to very considerable sums. But the fact is that in respect of the occupants of practically every house you pass as you walk along the street there is this investment of £380.
How many people are there who are holders of these securities? There are 17,500,000. I see the eagle eye of Lord Kindersley upon me, and if I quote a wrong figure he will, I hope, put me right. There are 17,500,000 individuals, out of our population of 45,500,000, who hold Savings Certificates. There are 18,500,000 individuals who have money in the Post Office Savings Bank, and another 3,500,000 who have money in trustee savings banks. A great many of these may be the same people, but I am advised by statisticians that it can be said with certainty that not less than 20, 000,000 individuals, and probably considerably more, are the holders of Govern-
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ment securities, out of a total population of 45,500,000.
When, therefore, Lord Teviot appeals to the people to be wary, he is appealing to people who have the power themselves to decide whether they shall succeed or fail in the task which Lord Southwood—and I agree with him—put before them, of financing these great schemes of social reform which will, I am sure, make a new heaven and a new earth in Britain—the Beveridge Report, financed and brought about; an end made to unemployment, as I am sure that it can be. We went wrong at the end of the last war, and we know it now. We can put an end to unemployment, and we can pay for what has to be done, but only if people keep steady and do not go wild or, what is even worse, become depressed and miserable and cease to lend their money gaily to the Government when Lord Kindersley says: "Now is the time to lend and enjoy yourselves: you can spend later on." I hope I have accurately described the kind of thing he says. It is because I am sure that we can weather this storm, though only by supporting this savings plan, that I have ventured to detain your Lordships for a few moments.
3.43 p.m.
LORD STRABOLGI: My Lords, this is really, as Lord Southwood has explained, the renewal of a battle which began last July with a very fierce attack by the noble Earl, Lord Glasgow, a battle which I thought had been ended by the complete defeat of the prophets of gloom by the speech of Lord Southwood in that debate, in which I assisted him as well as I could. Apparently, however, the prophets of gloom are not content with their worsting, and we have now a great reinforcement for them in the person of Lord Teviot. I shall endeavour to support the two noble Lords who have last spoken in trying to dispel this gloom which has been spread in your Lordships' House by the noble Lord, Lord Teviot.
On behalf, I am sure, of my noble friend Lord Southwood, and of other noble Lords who are interested in this matter, I should like to thank Lord Mottistone for his cheerful speech. If I may venture on one word of disagreement—it is only a matter of emphasis—it is this. Twice Lord Mottistone said that it is for the people to decide as to our future financial and industrial policy. That is

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perfectly true, but surely the people need a lead in this matter, and who can give a lead better than himself? I was very glad to hear his speech to-day. I should like to put a very few suggestions to Lord Teviot and to other noble Lords who, I understand, are here in force to support him. He quotes us again and again a comparison with 1910, before the last war.
LORD TEVIOT: 1914.
LORD STRABOLGI: It is the same period—before the last war. That was, of course, a period which was the end of a hundred years of peace, apart from a few minor conflicts, a period of great industrial expansion. We were, on paper, at the top of our prosperity just before the first World War. It is possible, however, to make the same sort of comparison of the burden of indebtedness and the difficulties of Chancellors of the Exchequer if you compare 1914 with, say, the reign of King Henry VII, when we had just emerged from the devastating Wars of the Roses, and England appeared to be almost bankrupt. What was the burden of taxation then? What was the National Debt then, compared with 1914? What was the national income in those days? I suppose that the population of this country was about 12,000,000. We had not the advantage in those days of the union with Scotland and therefore the advantage of leadership such as we now get from Lord Teviot and other distinguished Scotsmen. We had no Colonies, and a very small Mercantile Marine. Most of the country had been devastated in the Wars of the Roses, and there were plague and famine throughout the land. Yet that was the turning point in the history of England, and it was followed by the great Reformation, the Elizabethan epoch, and the great Industrial Revolution.
The three centuries which followed the end of the Wars of the Roses and the coming of a strong king, in the person of Henry VII, and a strong Government, saw this country emerge as a great Power and take the place of the Mediterranean Powers and of Spain as a great mercantile and navigating country, building up an immense overseas Empire. Yet the Lord Teviots of those days—such of them as had survived the Wars of the Roses—could have painted an even gloomier
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picture than has been presented to us this afternoon.
What was the reason for that great expansion from seeming catastrophe? I will try to link this argument with the present situation. This great expansion and development and increase of wealth and prosperity, and indeed of happiness, in this country, and to some extent in the whole of Europe, arose from two tremendous events. One was the decay of the feudal system brought about in England by the Wars of the Roses and the other was the Reformation, leading to an even more devastating war on the Continent, the Thirty Years War. But, because Europe was free from the shackles of feudalism and of the medieval Church, there was a sudden release of human genius and inventive capacity and adventure, with all the tremendous results which followed. I venture to suggest that the two World Wars through which most of us have lived, although they have brought about great material destruction and, to a, certain extent, great moral harm, as all wars do, have released new forces, new energies and a new spirit of adventure in mankind with which we can reconstruct and rebuild, and not only make good the material damage but open out a new and happier vista of human society not to be compared at all with that in which most of us have lived.
It that is to be done, however, we want leadership, and courageous leadership. I do not always see eye to eye with our present Prime Minister, but he showed the right sort of leadership after Dunkirk, when we faced the world almost alone and most people outside these islands thought that we were utterly defeated. After this war we can be made out to be terribly poor, bankrupt, impoverished. We may have lost some of our Colonies, and it may take a long time to reconstruct our commerce and to restart our trade. It is possible to paint a very gloomy picture and depress the people and do a great deal of harm. At the same time, as Lord Southwood has pointed out, it is possible to indicate the immense possibilities in front of us; and in the few minutes for which I shall speak I am going to indicate some of those possibilities.
We are bound to hear before this debate closes something about our export trade and the terrible difficulties of our merchants in the future. I had made to me

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in the list day or two the report of a very able economist who has been studying the Middle East market for one of our great industrial concerns. There is there an unsatisfied demand, and the purchasing power available, for an immense amount of equipment and goods of all kinds. The countries dealt with were Turkey, Syria, Iraq, Palestine and Egypt. In those countries there is a demand for agricultural machinery, pumps, vehicles for transport, textiles, fertilizers—a whole range of products for which the people of those countries have the money to pay, for those countries are comparatively rich as the result of the war. The peoples of the Middle East have accumulated purchasing power, and they need these things and desire to raise the general standard of life. In those countries which I have mentioned—supposed to be poor countries—there is an unsatisfied demand for goods to the estimated amount of £200,000,000. They have the purchasing power, and we can meet this demand because we have the capacity to produce every one of the goods which those people require In Palestine there is a sterling balance in their favour of £98,000,000 and there are large sterling balances in Turkey and Egypt.
I have seen a survey made of the position in Belgium and France since their liberation. The need there for goods which we have in abundance in this country is tremendous, and for an obvious reason. The Germans took for war purposes the very things—machine tools, asbestos, tinplate and that sort of thing—which we had to produce in great quantities here for war purposes. The result is that Belgium and France are very short of these things, of which we are beginning to have a superfluity, and as soon as the fighting stops we shall find ourselves with a great superfluity of them. We have a market available immediately at our doors in France, Belgium and probably in Holland, which is greater than the one I mentioned in the Middle East and which it will take us all our time for some years to satisfy. The same applies in many other parts of the world. If we go about it in the right way we shall have no trouble whatever in keeping our mnufacturers who serve the export trade very busy indeed. I can satisfy the noble Lord about the sources of that information if he has any doubt at all about it. With regard to the export
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trade, we can rest perfectly easy in our minds, provided our people have the courage to go out into those markets and have the energy to exploit them.
Something, however, is needed. The noble Lord, Lord Teviot, spoke of the Lancashire cotton industry and the need of £40,000,000 worth of new machinery. I have seen a higher figure, but I will take £40,000,000, needed for the Lancashire cotton industry to bring it up to date. Lord Teviot is a shining light in the City of London; he is a banker, and I believe he used to be interested in the capital issue market. I should like to ask him this question, if he will be good enough to reply when he winds up the debate. How would he like to go into the City of London, now or after the war, to try to raise £40,000,000 for re-equipping the Lancashire cotton industry? Would he do it if we took half-a-crown off the Income Tax and abolished the Excess Profits Duty? Would he do it if we took five shillings off the Income Tax? Would he guarantee to go into the City of London and raise that amount?
LORD TEVIOT: The noble Lord has asked me a direct question. My answer is that that entirely depends on how the Government handle the present situation which I have endeavoured to picture to your Lordships to-day.
LORD STRABOLGI: If I understand aright, the noble Lord means that if the Government of to-day do not satisfy the City of London the money will not be forthcoming. Is that his answer? If it is it is a very curious answer. It is a sort of—I do not like to use the word "blackmail," it is what the French call chantage. Then there is another question. The coal industry is very backward in its machinery and requires about £200,000,000 worth of capital equipment and new machines. Provided he is satisfied with the Government of the day would he be prepared to undertake the capitalization of the coal mines with new equipment to the extent of £200,000,000 —even if we reduced taxation? He is very optimistic if he does think so.
LORD TEVIOT: The noble Lord is putting up some very hypothetical questions, which I do not think I or anybody else in your Lordships' House can answer on the spur of the moment.
LORD STRABOLGI: Those are most practical and immediate questions. The noble Lord's whole thesis is that out of the public's savings are made the investments we need to finance capital expenditure. That is his whole case, and he says you have to encourage those financial circles by reducing taxation so that more money becomes available for their capital issues. That is the whole case upon which he bases himself. I venture to say that I should be very much surprised if he and his colleagues in the City of London would be prepared under the most favourable circumstances to raise £40,000,000 for new machinery for the Lancashire cotton industry, or £200,000,000 for the coal mining industry. It cannot he done, because those two industries do not now create the confidence to enable the City to raise from the public—from the public, mind you—£240,000,000. The fact of the matter is that there are people on these Benches who could solve that problem of the noble Lord. It cannot be done in the City of London, it can only be done by our collectivist method, and that will need courage and a planned economy.
I apologize to the noble Lord, Lord Teviot, and the other noble Lords who have taken part in this discussion for going back to Henry VII. I did so for reasons I explained. This country was in a much worse condition then than it is now. The noble Lord, Lord Teviot, quoted Mr. Gladstone. The noble Lord can possibly remember that in Mr. Gladstone's time there was a great outcry when the Budget was touching £100,000,000 a year—it was bankruptcy, ruin! Did something fall from the noble and learned Viscount on the Woolsack?
THE LORD CHANCELLOR: I was merely thinking to myself that the Budget never touched that figure in Mr. Glad-stone's time.
LORD STRABOLGI: I said that people were talking of it, were saying, "If this extravagance goes on we shall find ourselves with Budgets of £100,000,000, and we shall be bankrupt! "And there was grave apprehension of an Income Tax of is. in the pound. The Teviots and Stan-hopes and Glasgows of those days were full of gloomy forebodings. We have just heard from the noble Lord, Lord Mottistone, the figures of the present colossal
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and crushing taxation and our enormous National Debt, but also of the great savings of the public. His is the spirit I prefer. Keep that bold front, and do not continually spread gloom and despair and fear of bankruptcy, but rely upon the genius and patriotism of our people. Then there will be no need to fear for the future of Britain.
4 0 p.m.
EARL STANHOPE: My Lords, I found myself in agreement with Lord Southwood in a great deal of what he said, but I was a little doubtful about several of his points, amongst others the one referring to a Capital Budget. Now I understand why he put that fonvard. It was in agreement, of course, with Lord Strabolgi who wants to nationalize everything, and so he puts in a Capital Budget. May I give them both a word of warning? Many years ago I was travelling in Australia, and I asked how the nationalized railways there were getting on. In one of the States I was told this was the practice. They were put under three directors appointed by the Government, and the directors were continually being pressed by politicians to extend the railways to this or that constituency in which they were interested and where they might expect to gain votes. The directors—the leading one among them was a C.P.R. official before going to Australia—refused to have anything to do with the matter unless they had an absolute power of veto on all these proposals, and unless the Government, when they ordered a line to be built, laid a special Capital Budget before the Victorian Legislature. See what happened. These politicians had to make good their case when they extended a line of railway so that it was not a charge on the taxpayer. That did not go on very long because in many cases these railways were extended purely for political and voting purposes. They lost money, and the taxpayers did not like it.
Therefore I suggest to Lord Strabolgi that when he talks about the State financing the modernization of the coal industry, he will find he will have to make good his case to the taxpayers of this country who find the money. If the State can earn interest on such capital expenditure, so can the private investor. If you get confidence in the coal industry, the cotton industry, or any other trade you will find that the private investor will

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be prepared to come in and play his part. It will be entirely unnecessary for the State to take the place of the private investor. If you put the State in the position of the private investor you will not get that energy, that drive, or those other qualities mentioned by Lord South-wood as being absolutely essential if we are to build up the productive trade of this country. You will only get that from private initiative, private interest in the work and the freedom of thought which comes from private initiative. The noble Lord, Lord Strabolgi, talked about the great increase in our trade after the Wars of the Roses when it was freed from feudalism and religious interference.
LORD STRABOLGI: The medieval Church.
EARL STANHOPE: Yes, the medieval Church. He now proposes not to free us from the shackles of Government control, but to put us more in the shackles of Government control and cripple all that energy and enterprise which he thought so much of in times past. A great many people—I do not think Lord Southwood is among them-seem to think that the whole of this problem is quite easily settled is we increase our production. That is only a half-truth. Let me give examples which I think are right, and in any case a great many others could be given by your Lordships who know more about this subject than I do. Go to a newspaper proprietor and say to him, "As soon as the paper control is off I suppose you will print as many papers as your presses can print."
LORD SOUTHWOOD: As many as the public will ask for, not so many as the presses swill turn out.
EARL STANHOPE: Quite. The public will demand a large increase in the number of newspapers printed, but supposing that demand is for one million copies, does any sales manager imagine that a newspaper would be wise in turning out two millions? Your presses can turn out two millions. Why not do it? The answer is because you only produce as many as are required by the public. Take the case of cigarette lighters. We are now buying cigarette lighters and pipe lighters —not very good ones—at 6s. each. When the war is over and we can buy matches again, how many of us are going to pay
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6s. for a cigarette lighter such as is produced to-day? Of course the demand will go down. Therefore the real complete answer is that you must produce the things that the public require at the price they are prepared to pay.
For a country like Russia, the Soviet Union of course makes it a very simple matter for her home producers. She is extremely rich in natural products, and she has to go nowhere else to find the raw materials required for her manufactures. All she has to do is to put on adequate tariffs and adequate controls and quotas to keep out competition from abroad. Therefore she can sell to her people as much as her people require to buy at such prices as she pleases. That is not our problem. We have to sell abroad and' to export in order to get the raw products which are necessary for our home industry. That is our difficulty, and that is what Lord Teviot has in his mind, I think, when he suggests we have to be extremely careful that we do not overburden our industry with overhead charges greater than they can stand. We have to compete in other markets with other nations, and therefore, if you are going to pile taxes on to the manufacturers of this country, it stands to reason that these prices are going to be extremely high and non-competitive with other countries.
I made this statement some two years ago when the matter was debated before. Then the noble Viscount on the Woolsack said that I had forgotten the question of coal. I had not, but I wonder if he thinks our coal is going to get a very ready sale after this war. Even before the war began, in the days when the rest of the country was in a fairly prosperous condition, before the great slump, the most depressed areas in the country were the coal exporting areas. What was the reason? It was because coal from this country cost more than coal from other countries. It is true it was better coal, but it was expensive. As a result people began to use oil, electricity, water power, and the rest in place of coal. For five whole years now they have had to do without our coal, and our coal is not going to be any cheaper. In fact we know it is going to be a great deal more expensive. Therefore coal is not going to help us much in our export trade.

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Yet many of us were startled to find that if we are going to keep up our standard of living we have got to increase our exports by no less than six times their volume in 1938. That is a gigantic task. The only way we can do it is by seeing that our overhead charges are kept down and our productivity increased to the utmost possible extent. In the old days it used to be said that wages all over the world came out at very much the same figure. Wages in this country and in the United States were high, and in the Far East they were extremely low, but when we took a line through these wages they came out roughly level because of the very high expert and skilled advantage the workmen of this country possessed and our high rate of production. That, I am afraid, has been a good deal undermined by automatic processes, where one man or woman can look after a number of machines turning out a vast number of articles. Skill thus counts for less; but there are still many openings for the skill and drive of the people of this country.
On a former occasion I talked of "luxury trades." That was a wrong description. Perhaps a better description is "highly finished articles," such as motor cars, wireless sets and the rest. I am quite certain we can find a large market for these things not only in the Middle East, as Lord Strabolgi said, but also in South America and elsewhere; but only if we can sell at a competitive price. It is essential for every one of us to realize that we must do all we can to help to keep production in this country going to the utmost possible extent, to give every possible facility to manufacturers to use their skill, brains and experience, so that we may be able to compete successfully with other countries in the markets of the world. I entirely agree with my noble friend Lord Southwood that there is an immense market to be had in developing the backward countries, but let us remember this. How are those trades in those backward countries to be financed? Lord Strabolgi said we are not paying for this war by taxes or by credit, but we are paying for it by work. That is not a view all of us, I think, would accept because workmen have to be paid and services also have to receive their salaries. The war is, of course, paid for by credit and by
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taxes and unless you are going to tax the people of this country to finance that trade in those backward countries, it has to be financed by saving. As I said on the last occasion in July, people have a limited amount of money in their pockets and if you take too much of that money out of their pockets in taxes they have less that they can invest in production which is so essential, as we all agree, to the future of this country.
LORD STRABOLGI: Will the noble Earl forgive me? He has been kind enough to refer to me. He says we have to finance the exports of this country, or the trade of this country. Is he aware that there is a sterling balance in all these countries that I have mentioned? Palestine has a sterling balance of £98,000,000. They have that balance against us to pay for our goods. Then in Turkey and in Egypt they have sterling balances, and there is a balance of £2,000,000,000 in India. Those markets want our goods and they will have the money to pay for them.
EARL STANHOPE: £2,000,000,000 does not go very far when you are financing India for any length of time. I do not know what the ordinary trade of India was before the war. I am willing to agree that £2,000,000,000 goes a long way, but in many other countries there are no sterling balances. There is nothing in China and nothing in some of the countries of South America and in other places where there are great markets. Therefore I do not think I am in the least upsetting my argument when I admit that there are large balances in certain countries, because it must be remembered that in other countries there are very large debts indeed which will more than offset those balances.
But I do not want to take up any more of your Lordships' time. In July we were fed, I think, with a rather over-ration of soothing syrup from Lord Woolton when he replied on behalf of the Government. He did at any rate make this statement, which I again repeat, that we must not overburden industry with overhead charges which it cannot bear. And he did make another statement which I am quite certain my noble and learned friend on the Woolsack can certainly not agree with as an old Chancellor of the Exchequer. He said that the sole onus of responsibility in regard to expenditure

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rested squarely on the shoulders of Parliament. We are a democracy, it is true, but there is a thing in this country called a Government and this Government has got to govern whether there is democracy or not because anything else means mob rule. I am quite certain my noble and learned friend when he was Chancellor of the Exchequer found very little support for economy and careful spending from members of the House of Parliament. Therefore it is with the Government that this responsibility rests. It is they who have to say what is our position, and to show us that our position is indeed serious, but that it can be met if we manage to produce goods, and such goods as are required, at a competitive price. Only by freeing us from Government control and by keeping our overhead charges down to the lowest possible figure, shall we be able to do anything of the kind.
May I make one other remark which is perhaps rather beside what I have been saying? At the end of 1939 or the beginning of 1940 a very valuable report was produced by the Medical Research Council showing what were the maximum economic hours a man could work. One of the greatest mistakes that has been made by this Government in this war is that they have entirely forgotten that report and men in factories, and women too, have been working far longer hours, after Dunkirk, than was the economic limit. I believe they are still doing so at this moment in the repair of London. Let us realize, as Lord Woolton said, that to improve the conditions of the labour of people in our factories may be a wise and economic expenditure. That is not an overhead charge. It is not a wise thing to increase hours of labour. But let us realize also that that is an entirely different thing from loading industry with burdens which it cannot bear, and which bring it in no return whatever.
4.16 p.m.
LORD MONKSWELL: My Lords, the noble Lord who initiated this debate has told us what the financial position of this country is likely to be after the war. In listening to him and to subsequent speakers, I was surprised to hear that so very little attention was given to the subject of inflation. Inflation, to my mind, is by far the greatest danger which threatens us. Runaway inflation will destroy everything and it is impossible
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to exaggerate its danger. All plans and all undertakings are subject to the overriding condition that the currency maintains its value, and if these plans and commitments are of such a character as to make this impossible financial breakdown must ensue. In order to put things right, it is first of all important to decide what it is that is wrong. I should like to suggest one very simple explanation of our financial troubles which never seems to interest any appreciable number of people and is hardly ever mentioned in Parliament. It is that since the beginning of the last war this country has been living beyond its means.
During a war, while we are fighting for our lives, nobody expects us to live within our income. We have to keep going, whatever the cost, and leave the future to take care of itself. But, once peace returns, no country can go on permanently consuming year by year more than it produces. It may not be absolutely necessary to balance the Budget every year but if this is not done disaster is not far off. By balancing the Budget I mean much more than the Budget presented to Parliament by the Chancellor of the Exchequer every year. I mean that the total amount of goods and services produced each year in these islands must be at least as great as the total amount consumed and preferably much greater. As regards the official Budget, it is long since it was balanced out of income and for many years taxes have been largely raised from capital. It is also only too obvious that many persons have been selling out capital to meet their private needs. The root of the trouble is the absence of any material standard of value for the currency.
Theoretically, any one rigid standard is as good as any other but in practice gold is by far the most convenient. One of the great advantages of the gold standard is that any increase in the price of anything, including labour, is at once reflected in the increased price of gold and in an automatically diminished demand for the goods or services whose price has been raised—that is to say, the gold standard is a powerful influence in stabilizing at its market value the price of anything we buy. This is the precise reason why it is unpopular with idealists who dislike the notion of two and two making four, and appear to suppose that political action can supersede simple

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arithmetic. It is not necessary to have a great deal of gold to maintain the gold standard. What is necessary is that national production should not be less than national expenditure when both of them are measured by their free market values. The absence of any material standard of value at once removes the principal barrier against inflation. The politicians are then free to acquiesce in any demand that may arise for increased prices and not unnaturally the demands of the working classes, with their overwhelming preponderance of voting power, for increased prices for their labour, are constantly being accepted. But all this time nothing is being done to ensure that the supply of goods and services shall be increased to correspond with the increased purchasing power created. It is rather the other way. Increased wages are often accompanied by shorter hours.
It is true that improved methods, mechanization and so on may increase production, but no systematic action to produce this result has been taken and if it happens at all it is more a matter of luck than of foresight. What was achieved in the period between the wars was not greater national prosperity. It was a redistribution of national income in such a way that a much larger proportion was used for the purchase of consumer goods and in subsidies, which whatever their merits do not themselves produce any material object of value—it was used to secure present ease; and a much smaller proportion was used as new capital for the maintenance and increase of means of production—that is to say, for securing future prosperity. In these circumstances we experienced exactly what might have been expected—inflation of the currency owing to its greatly increased volume, uncompensated by an equivalent increase in production, and unemployment owing to the lack of fresh capital to provide new means of production. In saying this I am of course aware that the amount of what is nominally capital in this country is very large, but when examined it shrinks alarmingly. In too many cases it represents debt with no assets behind it. All holders of Government securities, for example, are obliged by law, for purposes of taxation at least, to regard the loans they have made as capital and in due course we all hope that assets will appear of the same
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or greater value. But they are not there now, and only a very small part of the National Debt could be sold out and used now if the war came to an end to provide new means of production.
It must be remembered that up to the outbreak of the last war, or at any rate up to the 1910 Budget, there was no question of this country being insolvent or going off the gold standard. What is the greatest change that has taken place in our internal finances since then? Obviously, the very greatly increased wages and subsidies that have been allotted to the working classes. It must be noted that subsidies in so far as they do not pay for themselves are just as much a cost of production as are wages. I think it is probably about right to estimate that on an average every workman and workwoman received in the years between the wars purchasing power—I do not mean money but purchasing power, wages and subsidies combined—double what he or she received before 1914. Put another way, the whole of the purchasing power available for distribution to the working classes before 1914 was in the interval between the wars sufficient for half of them only. Can anybody say that the production of goods and services kept pace, or nearly kept pace, with this increase? (Of course there is one other possibility, that the standard of living of the thrifty might have been so much reduced as to cover the gap, but I do not think there is any question that any such reduction was nearly great enough for the purpose.) If this was not the case, we have a complete and ready-made explanation of our financial troubles and a guide to their cure. The real purchasing power available—that is, the value of the nation's production—was insufficient to satisfy the demands upon it. The situation had to be met either by not employing workmen at all or by printing paper money with no backing in goods and services—that is, by inflation or by living on capital or by some combination of these methods. If what I have suggested is true, and I have very little doubt it is true, there are only two things that can possibly help—increased production and reduced expenditure. All the elaborate and incomprehensible vapourings of White Papers lead nowhere. We have taken the wrong road and if we wish to survive we must abandon it.
4.27 p.m.
LORD LATHAM: My Lords, I must apologize to the noble Lord, Lord Teviot, for not being able to be here at the commencement of his speech but I did arrive sufficiently early to hear that part of his jeremiad in which he seemed to reach a crescendo of gloom and despondency as to the future. Indeed he went on to imply that it was only those persons who took the gloomy view of the outlook who were in fact realists. I want to contest that view entirely. It is a common assumption of those who subscribe to the views of the noble Lord that those of us who sit on these Benches and the members of the Party we represent are mere idealists and have no experience in the world of realism. I want to ask who were the realists between these two wars. Were they not the bankers and economists of all sorts, kinds and descriptions who told us the proper thing to do was to contract, not to expand, to go back on the gold standard, to seek prosperity by pursuing a policy of scarcity? All that was supported by the people who then considered themselves to be realists and many of them still do so at the present time. Certain of them have been contrite enough to admit that they were wrong about the gold standard and that they were wrong about damping down production when what was needed was more production.
I wish to contest completely the view that only those who subscribe to the policy of gloom and despondency enunciated by the noble Lord, Lord Teviot, are the realists. The problem between the wars—this is apropos of what the noble Earl, Lord Stanhope, said—was not that there was not enough saving. There was too much saving. Saving was out of equilibrium with consumption and it was also out of equilibrium with investment. The trouble was not that there was too little saving, and it was not that industry could not get money to improve and perfect its machinery and its equipment. The money was there. But industry for reasons best known to itself, which are not unrelated perhaps to the profit motive, did not take advantage of these savings but adopted a policy which was approved by the Government of seeking to cure the problem of unemployment by a policy of economic scarcity, of damping down production and damping down consumption. It was even extended
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in one humiliating episode to reducing the unemployment pay of the unemployed by 10 per cent. That was one of the most humiliating facts in social history in the last generation. It was a disgusting episode.
EARL STANHOPE: Was it not a Labour Government who came in with the claim "We can cure unemployment" and failed to do so?
LORD LATHAM: It is no good for the noble Earl to play these tricks. I will have something to say perhaps about the record of the noble Earl himself if he will content himself in patience. I want to put this point of view: that whether you like it or not—it does not depend upon people making foolish speeches, and foolish speeches are bad by whomsoever they may be made—you will not be able to persuade the people of this country, who, with most of the effective labour power withdrawn from production and put into the Services, have nevertheless sustained this war for five years and produced goods—unhappily most of them for destruction I agree—to the value, as we have been told by the Chancellor of the Exchequer, of £24,000,000,000 (that is what we have spent in five years) that if we can do that for purposes of destruction we cannot maintain full employment during years of peace. If you seek to do it you will encourage discontent and, may be, tumult—let us be perfectly frank about the matter. I am not therefore suggesting that this country should pursue a policy of wastefulness or squandermania, but I do suggest that the country should face the problem in an objective way.
We have a large National Debt. That is the case. But nobody knows better than Lord Kindersley that all thrift must ultimately create debt unless you simply practise thrift by putting a coin into a stocking. There are two sides to the matter of every pound saved. One is the saving; the other is the debt which it creates if it is invested and used. Lord Kindersley and his associates, whom I wish well, cannot ask for additional savings without realizing and recognizing that savings if they be invested create debt, and the more thrifty people are the more debt is created. It is true that there is a difference between National Debt and debt created by subscription

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to debentures in companies or shares in companies. But debt is created just the same. And that brings me to the point whether Government expenditure or expenditure of local authorities is, of necessity, inferior in its quality or less advantageous to the nation than expenditure by private concerns. I reject the thesis that it is. The Government spend money, and local authorities spend money in much the same way as private enterprise.
LORD TEVIOT: May I just ask the noble Lord these questions? How does the Government and how do the local authorities acquire that money for spending to which he has just referred?
LORD LATHAM: In the same way that private enterprise does. Private enterprise obtains it by savings only. The nation obtains it by taxation as to one part, and by rates as to the other part. But it comes from the same pool. It is first created before either private enterprise, or the Government, or local authorities can get any of it and it is created by the same process—the work of human hands on raw materials. When the Government spend money on the Civil Service that expenditure is not necessarily bad. It buys clothes and food. It pays rent. It pays railway fares. In fact it is spent in just the same way as wages paid to servants of a public or private corporation. As a matter of fact, business in this country is fertilized very largely—and was before the war—by expenditure, sound economic expenditure, by the Government and by local authorities, creating very substantial assets, and, in addition to creating those assets, resulting in a return of social profitability the value of which cannot be estimated.
LORD TEVIOT: My Lords, I am so sorry to interrupt again, but may I ask the noble Lord another question? He suggested just now that it was the same thing when an individual invested his money in a private venture as when he had to pay the taxes of the country or the rates of a municipality. Does he really mean that?
LORD LATHAM: I will leave the noble Lord to read exactly what I said in the Official Report to-morrow. I do not propose to repeat what I said. I want now to come to the question of private enter-
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prise. I was, if I may say so with every respect, a little amused at what the noble Earl, Lord Stanhope, said with regard to Government expenditure. I remember, to his credit if I may say so, that a few weeks ago he was advocating the provision of, and indeed putting down Amendments to the Education Bill with a view to securing, better education. He took a leading part, I think, in insisting that no child below the age of eight years should be required to walk more than two miles to school. That, of course, cast additional expenditure on the local authorities who have to provide those schools. I applauded that, in a sense, but I cannot see how the noble Lord can have it both ways. If we are to have a more ample system of education in this country—and Parliament has so decided—it will mean more expenditure. It will mean more expenditure from the rates and from the taxes.
Now this is, I think, the real issue. The nation, by its activity, creates a certain pool of wealth which we express in pounds, shillings and pence. The Government might say: "The whole of that wealth shall be available for those who have made it." If that was so there would be no national services and no local services. The Government, however, say as to a certain portion of the money that it shall be paid to the Government by way of taxation, and that element of the pool shall not be left to be used by individual owners, but as Parliament may determine. There is another section in regard to which, under powers given by Parliament, the local authorities can say that of that pool they require so much by way of rates. And the local authorities spend it, I think, generally speaking, in a more socially beneficial way than its owners would spend it. Then there is the remainder which is available for the purchase of consumer goods, partly or wholly, and if partly the balance remains available for saving. The real problem that faces this country is to increase that pool, and it does not depend upon us entirely. Unfortunately, we are not a self-supporting country. We must import food and we must import raw materials. The approach to the problem in my submission should be how best can we enable ourselves to pay for the larger imports which the higher standard of living will require and the additional raw

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materials for which an expanded industry will call.
That does not depend, in my submission, on the amplitude or otherwise of the internal National Debt. I agree that as regards sterling balances held against us abroad and our external debt it is another matter; but as regards the internal National Debt, it is immaterial in this connexion. It is a redistribution of income, a redistribution, as it were, of rights as between the citizens who constitute the nation. No one would suggest that taxation should be oppressive, but I do want to enter this caveat. Taxation in the form of Income Tax, Excess Profits Duty or National Defence Contribution does not enter into overheads. These are taxes which are ascertained after the profit has been made; they depend on the profit and do not, therefore, enter into the cost of production. There are other elements of overheads to which I hope that industry, under the spur of the Government, will look. There is a good deal of waste in the overheads of industry, very largely resulting from inefficient methods and inefficient equipment. It is in that direction that research and examination will prove worth while. Taxation does not enter into price. I agree that unless there are adequate allowances for depreciation and the like, in order to enable equipment to be renewed and replaced, taxation can be restrictive, but outside that element I submit that since the taxation is on profits it does not enter into price.
I was very interested to hear the reference of the noble Earl, Lord Stanhope, to Australia and to the nationalized railway systems there. I remember in 1922 (I think it was) being very interested in a speech made by an eminent accountant in the City of London, now deceased, who was the Chairman of, I think, the only railway in Western Australia which was not nationalized. The burden of his speech to the shareholders in London was that it ought to be nationalized, and that it would be in the interests of Western Australia if it were nationalized. That seems to be a little at variance with what the noble Earl said. In conclusion, I wish to say that if we start upon the road to peace with the notion that we are going to be poor, with the notion that we cannot face our burdens, with the notion that we cannot provide for our people decent houses, decent social services and a
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reasonable standard of living, then we shall fail. In our approach to the problems of peace we need not doubt and despondency but courage and enterprise.
4.42 p.m.
LORD MESTON: My Lords, after the war the National Debt will stand at £25,000,000,000. If the whole of that debt is converted and consolidated on a 2½ per cent. basis, we shall have to pay £625,000,000 per annum by way of interest. The Civil Estimates will be greatly in excess of those for the year 1938 by reason of increased expenditure on social security, health, education, pensions and other services. The expenditure on the Defence Services will decline after the war, but will still remain heavy, having regard to our world-wide commitments and increases in the pay of the Forces. I am not a prophet, but I do not think it is far off the mark to say that the post-war Budget will be in the region of £2,300,000,000. So far as revenue is concerned, in 1943 taxation on the present basis yielded £3,100,000,000. In this connexion it must be mentioned that £250,000,000 of our present annual revenue is derived from the Excess Profits Tax, a special war-time imposition.
Moreover, we are living at present, as it were, in a balloon, for we are borrowing over £2,000,000,000 a year. This, in turn, creates many incomes which will cease or diminish when borrowing ceases, and when the war comes to an end we must either curtail borrowing on the present scale or go into liquidation. In the first two years after the war there will be a decline in the revenue, but no serious collapse of the revenue. During that period, the transition period from war to peace, the sale of war material and other factors similar to those which existed in 1919, 1920 and 1921 will create an artificial degree of prosperity; but thereafter—that is about 1947 or 1948—the revenue will decline, and, if its decline coincides with an increasing volume of financial commitments, we may expect startling Budget deficiencies.
We are constantly told that our capacity for increased production will carry us through our difficulties, but increased production is quite useless without increased consumption, and heavy taxation, not to mention also the burden of local rates, does not coincide with increased capacity for consumption. Further, we must not be led astray by wishful think-

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ing in regard to our export trade. I am sorry that the noble Lord, Lord Addison, is not here, and I hope that I shall not misquote him, but I well remember him saying on one occasion (and he was not contradicted) that our export trade, although important, represented only 12 per cent. of our total trade. If our export trade could be doubled it would represent only 24 per cent. of our total trade, and that in itself would not save the country. After the war we shall undoubtedly be in a better position than any other country, with the possible exception of the United States of America, to manufacture goods and export them abroad, but I am very doubtful indeed of the capacity of some of our customers to be able to pay for our goods for some years after the war.
We are sometimes told that there will be international agreements, the purpose and object of which will be to allocate markets to the various nations so as to eliminate wasteful competition between the nations of the world. So far so good, but where are those international agreements, and to what extent will they affect our export trade? There is a great deal of loose talk about increased production and international agreements, and in my opinion that loose talk is liable to do more harm than good. The fact of the matter is that we are living not only in a colossally inflated balloon but also in a fool's paradise. I understand that the aim and object of this debate is not to express our various views as to the best methods of conducting industry, but to ask His Majesty's Government for certain facts and figures. When we have those facts and figures it will perhaps be possible to have another debate and then explain how we are going to meet our commitments in view of the information which we have received.
4.49 P.m.
THE LORD CHANCELLOR: My Lords, the speech to which we have just listened has pleased us all by its brevity and its point. My noble friend defines the debate as one in which the Government are required to state certain facts and figures. I do not think, on reflection, that any reply from the Government can be expected to be of that statistical kind. My noble friend Lord Teviot, who introduced this matter, certainly takes a gloomy view, and what he asked was that
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the Government should say—I understand, say now—how much they considered the total of post-war expenditure would be, breaking it up, I suppose, into items. Well, that is, of course, a question which could not possibly be answered at the end of this debate, and I am not the man to do it; in any case it is in the nature of a prophecy or an estimate. What is reasonable is to ask whether the Government have appreciated and maturely considered the extent of the commitments that have been made and any commitments that may be contemplated; whether they have devoted their minds to the question whether this projected or proposed expenditure exceeds anything which the country can be asked to bear. I should be the first to agree with the noble Lord, Lord Teviot, that if the Government have gone into all this business quite lightheartedly, and have promoted an Education Bill and adopted plans of social security, and so on, without any endeavour at all to consider what will be the financial consequences, the Government would be deeply to blame.
The noble Earl, Lord Stanhope, if I may say so, was perfectly right when he said it is the Government that has the great responsibility in these matters, and I do not suppose anybody envies that side of the Chancellor of the Exchequer's duties at the moment. I do not think my noble friend said, but he almost implied, that Parliament has very little to do with it. Parliament, of course, has a great deal to do with it. In a democratic country the decision that is taken as to social improvement and the expenditure involved is a decision of Parliament, but it is a decision that is recommended by the Government; and the Government most certainly must take full responsibility for what they do. Therefore the answer I can give—and it shall only be brief—is of a modified kind, not entirely missing, I hope, my noble friend's points. I will tell him at once that it is of a rather more cheerful character than would appear from the tones in which he addressed us at the beginning. I did not hear anything he said very clearly, but I think that one of his sentences was, "Perhaps I have been too optimistic." Let me at once assure my noble friend that whatever the errors or omissions of his speech, no reasonable person would charge him with that.

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It is true some noble Lord said earlier in the debate that this in effect is a continuation of the debate we had last July, with the same issues and the same problems, and I am glad to say that for the most part, though not entirely as on the former occasion, it has not provoked any strong Party feeling. No complaint can be made of course when a responsible member of either House calls attention to the heavy financial burdens which the war will leave with us, and to the additional charges which we shall have to meet in the cost of reconstruction and in the cost of those developments of various national services, especially social services, which are commending themselves to all Parties, and are being adopted by the general consent of Parliament. It would be foolish indeed—almost parallel to the distracting condition to which Lord Meston referred, of a fool in his paradise loftily surveying the scene from an inflated balloon—it would be the height of folly, in other words, if the Government were not prepared to face the question: "Have you, as far as you can, thought out what you are doing, and are you wise in advising the country to do it?" That is the business of Government. I am very willing to say what I can in justification.
Let me just deal with what is perhaps a small point, but I think the noble Lord, Lord Teviot, on more than one occasion in his interesting collection of statistics found himself taking a more gloomy view than the figures themselves justified. For example, he thought that he might safely ask us to assume that at the end of the war the National Debt would be £30,000,000,000. I remember that the noble Lord, Lord Southwood, in the last debate was more moderate: he thought £25,000,000,000 more likely. As we do not know how long the war will go on, nobody can be sure, but if you take any reasonable computation, I do not think you will get to £30,000,000,000. Lord Teviot really got that figure, if he will excuse my saying so, through overlooking an important fact. He added together an internal debt figure which now amounts to £20,000,000,000 and a second figure, the figure of balances owing to external creditors You cannot add those two figures together for the purpose of arriving at a correct total, because these sterling balances which belong to our external creditors, are left in this country, and they are one of the sources from which
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we have borrowed. They therefore come in on the side of the internal debt, as well as coming in in another category—as being sterling balances owing to foreigners. You therefore cannot add the two figures together.
My noble friend, despairing, I think, of the Government itself producing today its Budget for some future year, made a sort of skeleton Budget for himself, but I think he, at any rate on some occasions, brought in as though they were annual charges in the future some things which certainly will not recur. Was not one of the figures which he brought in the amount the Government would have to pay for war damage? But that will not go on year after year. That is in the nature of a capital payment, and while it may be very difficult to finance all these operations at the time it makes an immense difference whether you are talking about expenditure which is likely to go on or about expenditure which has got to be faced as a heavy capital charge once for all.
That leads me, if I may for a moment branch aside from the main argument, to one or two points to which the noble Lord, Lord Southwood, referred in a very interesting speech. He said and many people say, that really after the war what we ought to have is two Budgets, and one of those ought to be called a Capital Budget. I am sure I may say this for the Chancellor of the Exchequer, or whoever is Chancellor of the Exchequer when that time comes. I feel quite sure that the Chancellor of the Exchequer and his advisers would look at a large post-war programme very carefully to see how much of it is really a recurring charge and how much a capital charge, and would decide in the case of the capital charge whether it should be met by borrowing—borrowing with an annual interest charge—or whether it should be faced and paid out of the year's expenses, as we endeavour to do in dealing with most of our expenditure connected with defence in time of peace. But the real truth is, I think—here I shall be checked by the noble Lord, Lord Latham, if I am wrong—that people sometimes get rather a wrong notion as to the extent to which national capital charges really do appear in the Budget. Taking the instances which Lord Southwood gave, he mentioned two examples of capital charges, for schools and hous-

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ing. Well, the capital charges there are incurred by local authorities. They do not come into the national Budget at all. What comes into the national Budget, of course, is the grant that is made year by year to assist the local authority. If you look through the scheme of national expenditure, by which I mean central expenditure, you will find as a matter of fact that there is not nearly as much capital expenditure in it as many people are disposed to think.
As I referred to Lord Southwood, I shall answer him on another point. He urged that there ought to be a Central Statistical Office which should from time to time draw up a perfectly objective statement of financial and economic statistics. We in fact have such a Central Statistical Office already. It exists, and it has done very useful work for the Government during the war. If my noble friend will look at the White Paper on Employment Policy—Lord Monkswell thinks White Papers cannot be put to anything but the most degrading use!—he will see it is there stated that it is the Government's policy to develop this Central Statistical Office after the war. I very warmly welcome my noble friend's approval of that course.
If I may for a few minutes return to what is the central question put by my noble friend Lord Teviot in his very carefully prepared speech, I will say this. Some of the future recurring costs which arise out of the heavy burdens we have undertaken are already capable of calculation. We can make a rough calculation, as the last speaker did, of what will be the debt charge. Others of them are as yet incapable of being precisely calculated, though my recollection is that when we have come forward with any of these big schemes like the education proposals—the same is true of the social insurance proposals—we have always made public what is the best estimate we could give of the expenditure. Anyone who did not make such an estimate, whether a Government or a private individual, would be the most reckless of mankind; but you cannot ask the Government to pin itself to a precise figure. The question turns on many things, some of which are not known to any of us, either the Government or anyone else. If the price of materials, for instance, substantially varies, it will at once affect the outlook.
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The main point—and this is what Lord Teviot came largely to emphasize, and of course he is perfectly right—is that these future recurring charges involved in the burdens must come out of the proceeds of Government revenue. That is perfectly true. For all practical purposes—disregarding the interest on Suez Canal shares and one or two other odds and ends—Government revenue is made up of the sums that individual citizens have to set aside in the form of either direct or indirect taxation.
If I understand my noble friend's concern aright, what he is saying is, "Are you satisfied, when you come to the end of the war, that having regard to this list of commitments, you will be able, without grave injury to the country as a whole, to get by direct or indirect taxation enough to meet these commitments, so that the amount does not exceed the possible total the Government may get by taxation?" That is the real question, and I do not deny it is a very serious one. Of course the taxpayer will at the same time, under the social insurance scheme, be making his own contribution, which is not a very small one, if you look at the White Paper. But it is certainly not a fair comment that the Government in this matter have rushed in blindfold or have embraced these plans which have met with so much approval without facing this essential question. I do not think I should be justified in saying that it is this consideration which made it, in the view of some people, a rather long time before the plan appeared, but you may be certain that the most careful examination has been made by the Chancellor of the Exchequer and the Government of that particular question.
There is this to add. Lord Strabolgi referred to the days of Mr. Gladstone, when the total Budget never came to £;100,000,000. It never came to £100,000,000 in Mr. Gladstone's lifetime, and he would be greatly astonished if he could appreciate what is happening now. But we have got to remember that there is an enormous difference between the two periods. In the old Gladstonian days the purposes for which the Government taxed and spent money were exceedingly limited. Vast numbers of things which, with the common consent of everyone to-day, are properly shouldered and administered by the State, with the contributions which are got from the citizens,

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are things which were quite outside the Gladstonian ken. I, too, do not want to indulge in any Party reference, but I find it difficult to forget entirely that when the Old Age Pensions Bill came before your Lordships' House—and under Mr. Asquith's proposal it was a very modest old age pension of 5s. a week—there were most respected members of your Lordships' House who described it as a pauperizing of the poor and a grossly improper use of the power of Government. That is all changed long ago, and we do not remind one another of these ancient things.
There is thus a certain fallacy in dwelling too much on the fact that the Budget was under £100,000,000 in Gladstonian days. It was only £200,000,000 in the year before the last war. The truth is that there has been an immense revolution of thought which has affected every Party—it has affected the Party of the Right very powerfully—so that instead of looking askance at national insurance, which I seem to remember was the situation once, we are all tumbling over one another in our belief that that is a proper way of dealing both with questions of health and questions of unemployment. It follows necessarily that the State, taking a much greater part and having to raise a much greater sum of money, takes a much larger proportion of the income of the taxpayer than would have been tolerable in the old days. That has got to be remembered. As I have said, the annual interest charged on our debt can be roughly estimated, as Lord Meston estimated it just now; other matters are more speculative, but let me point out—because it is right we should dwell on the bright side as well as the dark side—that the financial policy which has been followed in this war in the biggest matters has turned out to be well justified and ought to receive approval.
Our financial policy was closely discussed and prepared for before the war broke out. We had only been at war three weeks when there was an emergency Budget which contained three large propositions. I do not think any one of them would have been accepted or would have been comprehensible to the economists of half a century ago. The first was that we must at once, immediately, put very heavy direct taxation on the citizens. One or two of my political friends were really doubtful whether the 7s. 6d. we
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started with was not going to be so heavy a burden as to distort, disturb and generally shake up the industrial machine, and whether it might not be dangerous to go so fast. It did not turn out to be so. While, of course, the 10s. in the pound tax is a terrific one for many people, especially when you bring in Surtax on top of it, there cannot be the slightest doubt that it was in fact a very wise and a very helpful plan to adopt heavy direct taxation immediately the war began. It has this enormously important result, and astonishingly so, that in this present year 52 per cent. of our Budget expenditure is being met out of taxation—and that could never have been done otherwise. No one, I think, can dispute that. Incidentally it had a second reaction in which my noble friends Lord Mottistone and Lord Kindersley have a special interest. If you put a sufficiently heavy direct taxation on people you will make it very difficult for them to spend foolishly at a time when you must do everything to prevent inflation.
That was the first thing and I think it was a great and wise thing to do. My noble friend Lord Teviot, surveying the matter as I am sure he does with every desire to be impartial, must put that on the other side of the account. There was a second proposition, that in war-time the Government should be able to borrow at a very cheap rate. The other day your Lordships may remember a question was addressed to me by Lord Samuel about Premium Bonds, asking whether the Government had any intention of going in for that species of State lottery. I gave the answer, but I do not know that everybody remembered that at the time the Premium Bond became a popular specific at the end of the last war, we were borrowing money at the rate of 6½ per cent.—and not too successfully then. The real argument then was: "If you have to raise more money you will have to give better terms still and you had better try another kind of proposal." That was the second thing and we fulfilled that because the truth is, at any rate in war-time when the Government exercise such a complete control over financial borrowing, it does not allow private enterprise to borrow except for a good reason. You can therefore really borrow what you want at a very cheap rate. The rate you must offer must be sufficient to induce people not to keep their money locked up in a drawer.

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We have at this very moment two loans going along most happily, as they say, "on tap." One is a 3 per cent. loan which is redeemable, I think, in 1975, the present Savings Bond issued at par, not at a discount, and the other the 2½ per cent. National War Bonds redeemable in 1954. Talk about Mr. Gladstone—clarum et venerabile nomen—if you could secure the attendance here of that mighty shade I think he would be greatly surprised to find we had been able to do that in the fifth year of the war.
The third thing was this method of national savings. I can well understand the criticism that some of the money comes from the banks and some from the Prudential Assurance and other companies, but the fact remains it is an immensely powerful instrument, magnificently managed by those who are in charge of it, which has not only produced a very large sum from the poorer citizens for meeting the expenditure of the war, but has done a second thing which is even more important—namely, it has dissuaded the ordinary small man in the small house and the small street from making a foolish and wasteful use of the money which is coming into the home. I most warmly agree with what has been said by two speakers from the Opposition Front Bench that the great thing is to realize we have got our own people trained up into this spirit of organized endeavour and what we want to do now is to make them feel that the call to that endeavour will not be less, but will be greater, when the war is over. That, I am sure, is the view taken by the Chancellor of the Exchequer.
While, therefore, I have not given an estimate of future Budgets—I really cannot do that, nobody can do it now—for whereas all other business is discussed for months in the Cabinet, in the single case of the Budget the Chancellor of the Exchequer ordinarily and traditionally turns up with his proposals under his arm, some fine morning, explains them to his delighted or astounded colleagues, and in the House of Commons the same afternoon makes his proposals public. While I am not able to do that, I hope my noble friend will feel that there is some ground for being reassured, when I tell him, as I do most solemnly, that these outlays, heavy as they are, are certainly most carefully studied by those re-
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sponsible for our finances. We never have asked the people of this country to endorse proposals like these of so extensive a kind without first doing our best to count the cost and estimate whether it is within the ability of the country to pay for them. I believe it is, and I think there are many considerations which go to show that, while it is indeed quite right to raise these matters, the right view to be taken after raising these questions from time to time is to realize the enormous importance of maintaining the spirit and the courage of the people.
I recall having read that at the time of the Napoleonic wars Pitt was challenged in the House of Commons to say what had the country gained by the Napoleonic struggle and Pitt replied: "Sir, she has gained everything that she would have lost without it." That is the real answer to those who look now with great anxiety at the future. The day may come, probably will come in this free country, when a certain number of people (the war being over and victory gained and when these matters have passed into history) will point with horror at these figures and exclaim about the commitments that were made at this time. That will not alter the fact that it is right to do what we have done and right to do it now when it is fairly popular. Let us resolve always that we will defend it if ever there be critics hereafter who get up and reproach us for what we have done.
5.19 p.m.
THE EARL OF GLASGOW: My Lords, as I have come all the way from Scotland to say my few words, I hope some of your Lordships will bear with me for not longer than a quarter of an hour. My noble friend Lord Teviot in his Motion has done a great deal to clear the air. He has had a very difficult speech to make. He has brought forward a number of facts and figures, none of which, in my hearing, have had any effective answer though the noble and learned Viscount on the Woolsack has cheered us up very much. I feel that I have been chid before I have made the remarks that I now intend to make.
My noble friend Lord Teviot has gone into action with all guns blazing and I cannot think of any effective reply to his damaging broadside. I do not think the noble Lord, Lord Southwood, said anything very effective, because his speech was full of suppositions, hoping that if

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such and such a thing might happen we should get all the good things we are looking for. The noble Lord complained about the rise in the cost of living. I always feel in a quandary on these occasions because one is promptly accused of stirring up strife between Parties, but one cannot face facts without stirring up strife between Parties. So I want to make this remark. The noble Lord complained about the rise in cost of living, but he did not go on to give the facts. The facts are that the rise in the cost of living is due to the continued demand for, and the constant giving of, higher wages. Prices have now for some time, certainly for the last four months, been below the general trend of wages in the country. I am a member of an industrial council and I have seen this going on. We have just given a rise of 4s. 6d. to manual workers employed by the council. I do not grudge it for a moment, but this demand for increased wages was debated and sent to a tribunal because the council did not approve of it. The increase was given, but not because of a rise in prices. It was given because engineers or some other body of workers had been given an increase. This position of affairs is not the fault of the Government.
There is no doubt, I am afraid, that the noble Lord who moved this Motion will find that to tell the truth about our commitments is not popular with the Press or with the uninformed public. Facts are at a discount and wishful thinking at a premium. Wishful thinking is something which should be well known to your Lordships because your Lordships have been thinking wishfully—or wistfully perhaps—for a considerable time. Some months ago it was suggested—I do not dare to say promised—that your Lordships should be paid travelling allowances, but the whole matter seems to have hung fire. Naturally I cannot expect an answer now on this point, but it is apparent that there is some hitch. As I am an advocate of delay for economical reasons in the expansion of Social Services, I cannot, even though I come from north of the Tweed, conscientiously object to delay in this small matter. I merely mention it as an example of wishful thinking.
I come back to the Motion on the Paper. Including the social insurance scheme the Government have committed
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themselves, if Parliament approves, to an increase of expenditure on the Social Services of £800,000,000. That is an underestimate, but what does it matter about the exact number of millions? We cannot tell what the number of millions will be, but it is round about that. During the most expensive war in history they have encouraged Parliament and the country to go in for an orgy of extravagance which, however worthy the object, may have terrible repercussions on the welfare of our people. And it is no ordinary Government that has done this. It is a Coalition Government of all the talents, and it is a Government which has admitted in Parliament that it does not know from what source the money is to come for the expansion of the Social Services. Nevertheless by the White Paper policy the Government continue to suggest that this expansion should go forward. The Rake's Progress is to go on and damn the consequences!
The Government must know that to provide £800,000,000 at this time, or even within ten years, when there are no sources available, is risky and imprudent. Any attempt to tack on this huge sum to our other commitments, which include interest on War Loans already running into thousands of millions, must add greatly to the chances of inflation and unemployment. Why are the Government suggesting this tremendous risk? My view that they have yielded against their better judgment to strong pressure is strengthened after reading the White Paper on tile social insurance plan. I expected to find in the introduction the conditions under which this huge expenditure might be met and a justification of such expenditure if those conditions could be fulfilled. I expected to read stern warnings that unless certain conditions were carried out—such as the cessation of all strikes, our ability to get the export trade going and increased in volume over the pre-war years—the social insurance plan would have to be postposed until the country could afford the cost. But there was nothing of this, even although both the National Health Insurance Bill and the social insurance plan could be delayed without any great hardship to the people; delayed until, in the words of Sir William Beveridge; the British community can so reorganize itself as to be in a position to meet the cost. It is true that Ministers of all

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Parties, to their credit, have warned the nation on several occasions of the conditions which will have to be fulfilled, but the Government as a whole have given no lead.
With regard to the second part of the noble Lord's Motion, regarding likely methods for meeting the expenditure, it certainly cannot be met by increasing taxation. Then where is the money coming from? For there is still such a thing as money. The noble Lord, Lord Woolton, has said that if we are to have State schemes for social betterment the cost will fall broad based on the public at large who will receive the benefits. The noble Lord is always very courteous and I hope he will not think me impolite if I say that anyone who thinks that this nice comfortable statement is an effective one is living in a dream. Is it likely that people will be prepared voluntarily to add to their taxation without compensation? Directly these taxes are placed broad based on the workers, the trade unions will demand a rise in wages to make up, with the heavy resultant increase in the wages cost in industry. However politicians may twist and turn, economic facts remain constant and if the nation decides to ignore these facts and the laws of supply and demand we shall be heading for financial chaos.
As I have said, there is no source from which further taxation can come, so the answer is that the nation must go slowly, carefully and economically. If I might dare to be constructive surely it might be possible for the Government to suggest to Parliament that with the exception of housing there will be no new expenditure on Social Services in the meantime and they should announce their policy of priorities. Very diffidently I suggest that the first priority should be national security, the second war pensions, the third housing, and the fourth war debt services. I would suggest that we overtake most of our housing arrears before we launch out on any further social service expansion. There is one economy that might be made after the war with Germany is ended, apart from a certain amount of demobilization—namely, the cutting down of the Civil Service Departments. But I must put against this the post-war burden on the ratepayers on which the Government may be forced to take action. At the present moment
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the burden on ratepayers is heavy enough and strong protests are already being made all over the country, but with the extra contributions to be thrown on them after the war—£80,000,000 for education alone—the burden will be insupportable and the Government must prepare themselves for something in the nature of a revolt which may result in large extra sums not at present estimated for being borne by the Exchequer.
I would like to refer to the statement by the noble Lord, Lord Southwood, in the debate last July, when he said that we must not repeat the errors of restriction and economy which were carried out at the end of the last war and led to unemployment. The answer is that surely it is arguable that unemployment between the wars was not due to the cause he mentions but rather to world conditions. If we had not economized we might have had five million unemployed instead of two million. However that may be we should, in my opinion, do our best to keep expenditure within reasonable limits. In order to get our export trade going, taxes will have to come clown, and it is doubtful whether wages can remain as high as they are now. I look on the statement, so often made by those who refuse to face facts, that we, in this country, can afford to pay as high wages as are paid in America, as complete moonshine. The United States is a self-contained country with a population three times the size of ours. With her large home market and the ability of her manufacturers to produce in bulk, they are in a position to pay high wages to their workpeople. The home market in the United States is so large that she has no need for an export trade, or to compete in foreign markets. This does not mean that she does not export. Of course she does, but she, unlike us, has not the vital necessity to do so, and more often than not what she exports is the residue of what she produces for the home market, and is sold abroad at a loss if you take into consideration the full overhead charges and spread them over this export output.
There was a motor car factory in the States which, before the war, produced a thousand cars a day. With the exception of about ten per cent. all these cars were absorbed in the home market. The ten per cent. were sold abroad at a price low enough to meet foreign competition. In other words they were sold at world

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prices. With our 45,000,000 people we are one of a few countries in the world which is not self-supporting. We have to import more than one-third of our food and our raw materials, and, in order to import, we have to export at a price which the foreigner will pay. Therefore, we cannot give the same high wages as are paid in America, which is self-contained with a large consumer population. The Minister of Labour was reported to have said on February 11 that:
"We have lost our overseas investments, pawned them, sold them and depreciated them, and after the war we shall have to live on our annual production year by year."
I venture to repeat this statement to your Lordships because it is so important and necessary that everyone in the country should realize that everything that can be done to help our export trade should be done, if only to ensure, apart from anything else, that when the country is going through the pains and agonies of the change-over from war to peace production the nation will get enough to eat. The other day Mr. Kenneth Lindsay returned from a tour in the United States, and this statement by him has appeared in a Scottish newspaper:
"Amidst all the misrepresentation and misunderstanding over there, there is throughout America a profound admiration for the stability of Britain."
For heaven's sake let us try to live up to that.
Finally, we have in this country, if they car be given a chance, some of the most enterprising and experienced industrialists in the world, and our working men have shown that, when they like, they can work hard and skilfully. The trades unions, led by patriotic men who have put country before Party, have done well throughout the war, but I venture to think that, as peace comes nearer, trade union leaders are losing their grasp of realities. It is a pity, for example, that the childish bickering between the protagonists of private enterprise and nationalization cannot be decided on the basis as to what is best in the interests of the nation at this very critical period, and certainly the resolution passed by the Trades Union Congress in favour of a forty hours week and a fortnight's holiday with pay, makes it appear as if they had not yet faced up to the fact that unless all hands work harder than they have ever done
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before, and goods are produced at competitive prices, the nation will not be able to afford any betterment in its social condition. That point of course has not been put by the noble Lord, Lord Southwood. He has not insisted that we have got to produce goods at competitive prices; but that in my opinion is the whole argument. If, somehow, our industrialists and the men they employ could be brought to work together in harmony and contentment for the resuscitation of our trade and for the prosperity of the country, then indeed our people may get all the good things they are looking for.
5.36 p.m.
LORD TEVIOT: My Lords, I will not keep the House more than one or two minutes. I am not at all sure that the word "gloom" which has fallen from the lips of some noble Lords, including, I believe, my noble and learned friend, has not depressed me much more than anything else in this debate. Nobody has endeavoured to combat any of the statements that I made, but I am accused of being gloomy because I have sought to state to the best of my ability what the situation really is. My noble friend Lord Meston did the same thing. He merely expressed his view of the situation. There was only one reassuring statement, and that was made by the noble and learned Viscount who sits on the Woolsack. It was to the effect that he was sure that the Government had the capacity to stand up to the situation as I had depicted it.
I could speak for a long time, particularly in regard to what my noble friend Lord Latham said. He rather gave the impression, or seemed to wish to give the impression, that I was amongst those who made foolish speeches. I do not mind that a bit. I came here to make a statement on the situation, which I believe to be one of great gravity, and I am hoping that the figures I gave and the situation which I depicted will have consideration. Indeed I may say that I am sure they will, and therefore I have derived great reassurance from what my noble and learned friend on the Woolsack has said. He has assured us that the Government have taken all these factors into consideration.
But I would ask the Lord Chancellor to remember this. In the course of the last few weeks we have had a speech in which a rather serious warning was sounded by

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the Chancellor of the Exchequer. We have also had one from the Financial Secretary to the Treasury. Statements have also issued from other important sources, warning us that we must be careful not to get into deep water in regard to expenditure. That is disturbing the minds of industrialists, and we want to know as much as we can possibly know as to what is the real situation for there are various matters which are very obscure to-day. We have had this reassurance of which I have spoken, and I am sure it will have an effect on all these people who are perturbed about the future. I thank the noble and learned Viscount for his very kindly reference to myself, and for his reply to the debate which I raised. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

ITALIAN PRISONERS OF WAR.
LORD SOUTHWOOD: My Lords, on behalf of my noble friend Lord Strabolgi, I beg to ask the question standing on the Paper in his name.
[The question was as follows:
To ask His Majesty's Government whether they can state the approximate percentage of the Italian prisoners of war in this country who have volunteered to co-operate in the Allied cause; whether these men are employed on work of national importance; and whether, generally speaking, they have given, and are giving, satisfactory service.]
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR WAR (LORD CROFT): My Lords, approximately 70 per cent. of Italian prisoners of war in this country have volunteered to co-operate in the Allied cause, and are employed on work of national importance. They have given most satisfactory service up to the present time.

UNEMPLOYMENT INSURANCE (INCREASE OF BENEFIT) BILL.
Read 3a (according to Order), and passed.
House adjourned at twenty minutes before six o'clock.