Sitting of 27 November 1945

Preamble
The House met at a Quarter past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BILLS [Lords]

  STANDING ORDERS NOT PREVIOUSLY INQUIRED INTO COMPLIED WITH
  Mr. SPEAKER laid upon the Table, —Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been; omplied with, namely:
  Metropolitan Water Board [Lords].
  Bill to be read a Second time.

ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT

    Staggered Holidays
    Wing-Commander Roland Robinsonasked the Minister of Labour whether he is now in a position to announce what action he will take to secure a spread-over of holidays, as recommended by the Catering Wages Commission.
    The Minister of Labour (Mr. Isaacs): This matter is being actively considered, and I hope to be in a position to make a statement at a fairly early date.
    Wing-Commander Robinson: Is the right hon. Gentleman aware that the Commission pointed out that there was need for immediate action, if grave social consequences were to be avoided? Does he
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    not think that three months are enough time for the Government to make up their minds?
    Mr. Isaacs: It is not a question of the Government making up their minds but of finding out how the recommendations can be applied. There are two real problems. The first is how to apply the staggering of wakes weeks for each town. This matter is at present being examined by a joint committee of industrial employers and workers. The second problem is how to stagger the holidays of universities and schools, and that question is being gone into by a committee of the Ministry of Education. The matter is being actively pursued and I hope to be able to make a statement fairly soon.

    Labour Control
    Major Guy Lordasked the Minister of Labour how much longer it is proposed to maintain the Essential Work Order.
    Mr. Isaacs: I would ask the hon. and gallant Member to await the comprehensive statement about labour controls which I hope to make shortly.
    Major Lloyd: In anticipation of that Bill statement may I ask whether it is not a fact that this Order has outlived its usefulness to a large extent? Is it not of the utmost importance that discipline should be restored to many workshops and factories, which restoration the Essential Work Order makes impossible?
    Mr. Isaacs: No, Sir, I cannot accept the suggestion that the Order has outlived its usefulness. It is serving a useful purpose. There may be one or two isolated instances to the contrary, but in the main it is still very valuable to industry.
    Captain Crowder: Cannot the Minister ask his officers, anyhow, to be a little more lenient in regard to the direction of women who have come out of the Services?
    Mr. Isaacs: The Essential Work Order is a different matter altogether from-direction of labour.
    Mr. Kirkwood: Is my right hon. Friend aware that, if he allows the Essential Work Order to be rescinded, the most highly skilled engineers, the marine engineers, will at once seek higher wages and salaries than are now being paid to them in the shipyards?

    Iron Foundry Industry
    Colonel Errollasked the Minister of Labour what plans he has made to attract apprentices into moulding and other skilled foundry trades.
    Mr. Isaacs: It is for the iron foundry industry itself to devise a satisfactory apprenticeship scheme. Both sides of the industry are giving this matter their active consideration in co-operation with officers of my juveniles branch.

    Unemployment (Statistics)
    Mr. Rankinasked the Minister of Labour the numbers of unemployed persons, male and female, registered in the Tradeston division of Glasgow; and what percentage these numbers are of the insurable population in the division.
    Mr. Isaacs: The only figures available relate to the numbers of unemployed persons registered at particular employment exchanges, and the areas served by these offices do not coincide with Parliamentary divisions. At 15th October, 1945, the number of insured unemployed persons on the registers of the Glasgow South Side and Kinning Park exchanges were 1,607 males and 1,064 females, representing respectively 5 per cent. and 4 per cent, of the numbers of unemployment books exchanged at those offices.
    Mrs. Jean Mannasked the Minister of Labour the percentage which the number of men and women registered at Coat-bridge and Airdrie employment exchanges at the last convenient date represents of the insured population of this division.
    Mr. Isaacs: The number of insured men and women aged 18 years and over registered as unemployed at Coatbridge and Airdrie employment exchanges at 15th October, 1945, represented II per cent. of latest figure for the number of unemployment books exchanged at these offices by insured men and women.

    Training
    Brigadier Prior-Palmerasked the Minister of Labour whether, in the case of men returning from the Forces who are desirous of learning a trade other than one catered for by the Ministry of Labour courses, such as dental mechanics, he will arrange that these men may be taught by practising approved tradesmen who are willing to receive them and that their fees be paid.
    Mr. Isaacs: Under the Government's vocational training scheme, special arrangements can normally be made for training on an individual basis to meet the kind of case to which the hon. and gallant Member refers.
    Brigadier Prior-Palmer: Will the right hon. Gentleman make that answer known more widely among his subordinates, because there is great difficulty in getting the facts appreciated at local labour offices?
    Mr. Isaacs:I will look into that suggestion.
    Mr. Lipsonasked the Minister of Labour why the course of training in upholstery for demobilised men promised to be started in Bristol a month ago has not yet started; and if, in view of the hardship caused, he will arrange for it to commence without further delay.
    Mr. Isaacs:Every effort is being made to start this course as soon as possible. Delay has been mainly due to difficulty in securing essential items of equipment.

    Building Workers
    Mr. Quintin Hoggasked the Minister of Labour whether the figure of 750,000 operatives in the building trade by 10th May, 1946, is still the estimate of the Government.
    Mr. Isaacs: Yes, Sir.
    Mr. Hogg: In those circumstances, will the right hon. Gentleman dissuade his colleague the Minister of Health from giving absurdly over-optimistic estimates of the prospects next June?
    Mr. Isaacs: I am sorry that the Minister of Health did not have this question addressed to him direct so that I could have heard his reply.

    Cotton Spinning (Wages Commission)
    Mr. Harold Sutcliffeasked the Minister of Labour if he has now considered the Report of the Evershed Commission on Wages in the Cotton Spinning Industry; and what action he proposes to take.
    Mr. Isaacs: Yes, Sir. This report will be of the utmost value to the industry. I have asked the employers organisations and the trade unions concerned to give it immediate consideration and to keep me informed of the progress 'made.

  DEMOBILISATION

    Agricultural Workers
    Mr. Turtonasked the Minister of Labour whether he will now announce any change in policy regarding the granting of Class B releases for work in agriculture.
    Mr. Isaacs: This matter is still under active consideration, and I hope to make a statement shortly.
    Mr. Turton: Is the right hon. Gentleman aware that the delay in reconsidering the matter is holding up food production?
    Mr. Isaacs: I cannot accept that suggestion in its entirety, but I would ask the hon. Gentleman on this Question, which is interlocked with the Question I have just answered and the next one on the Paper, to accept my earnest assurance that the matter is being actively dealt with, and that I hope to make a statement very shorly.
    Mr. Turton:Can the right hon. Gentleman say what "very shortly" means?
    Mr. Stokes: It means "very shortly."

    Class B (Time Lapse)
    Mr. John Lewisasked the Minister of Labour the average time which elapses between a recommendation by a Supply Department to his Ministry for Class B release of a soldier serving in this country and the date of his return to civilian life.
    Mr. Isaacs: Provided that the soldier can readily be identified and located, and that he makes up his mind at once to accept the offer of release in Class B, the average time taken in the United Kingdom from receipt of the application by the Ministry of Labour and National Service to the release of the individual, may be taken as about 2½ weeks.
    Hon. Members: Oh.
    Mr. Lewis:Is not my right hon. Friend aware that, while he might have been informed that the facts are as stated in the answer which he has given, in point of fact the usual period is 2½ months? Would my right hon. Friend take steps to ensure that some inter-departmental machinery is instituted almost immediately so that people who are required for
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    essential reconstruction purposes are brought back to civilian life as early as possible?
    Mr. Isaacs: I will deal with the first part of my hon. Friend's question, and ignore the hinder part, which was more like a speech. The figures I gave were taken from our records. I say that the average time for people in this country is round about 2½ weeks. Some hon. Members may have supposed that I was speaking of the scheme as a whole, but I would repeat that in this country the average time is 2½ weeks.

    Rate of Release
    Major Peter Roberts: asked the Minister of Labour whether, in view of the urgency of getting industry into full production, he will insist on an immediate acceleration in the speed of demobilisation in order to release manpower for industry generally, and particularly in Sheffield.
    Mr. Isaacs: I would refer the hon. and gallant Member to my public statement of 2nd October about releases from the Forces and the statements I made in the Debate on 22nd October, to which I am not at present prepared to add.
    Major Roberts: I am aware of that statement, but may I ask the Minister whether he will given me a definite assurance that he will bring pressure to bear on the Service Ministers forthwith in this matter?
    Mr. Isaacs: I can assure the hon. Member that all the necessary pressure is being brought to bear.
    Major Roberts: I beg to give notice that I shall raise this matter on the Adjournment.

    Wool Control Recommendations
    Colonel Stoddart-Scottasked the Minister of Labour if he is aware that the Wool Control has declined to recommend a sailor for demobilisation, Class B, on age grounds only and, in view of the specific assurance given to the hon. Member for Pudsey and Otley on 29th October, 1945, that the age of an individual did not make him ineligible for release in Class B, what steps he is taking to bring to the notice of the Wool Control all the details of the demobilisation scheme.
    Mr. Isaacs: I am not aware of the case to which the hon. and gallant Member refers, but if he will send me particulars I will make inquiries. Full details of the demobilisation scheme have been brought to the attention of the Wool Control by the Board of Trade.

    Articled Clerks
    Sir John Mellorasked the Minister of Labour whether he will make articled clerks who, having passed their intermediate examinations are semi-skilled, eligible for release under Class B from military service in the same way as semiskilled tradesmen.
    Mr. Isaacs: I would refer the hon. Member to the reply given to the hon. Member for Isle of Ely (Major Legge-Bourke) on 23rd October, a copy of which I am sending him.

  MILITARY SERVICE

    Articled Clerks
    Sir J. Mellorasked the Minister of Labour whether he will allow articled clerks to complete their articles before being called for military service in the same way as trade apprentices are deferred until the end of their indenture period.
    Mr. Isaacs: No, Sir. The call-up of apprentices is not deferred on account of apprenticeship except in some occupations in the engineering and shipbuilding industries, and then only to an extremely limited extent. I cannot regard this as a valid reason for changing the practice in regard to articled clerks in present circumstances.
    Sir J. Mellor: Is not there a great shortage of accountants at the present time? Why should there be this adverse discrimination in respect of articled clerks?
    Mr. Isaacs: I hope I can make it clear that there is not an adverse discrimination. An apprentice is not deferred because he is an apprentice but because he is doing work of vital and essential character. It is the character of the work and not the nature of the terms of employment on which deferment is given.
    Sir J. Mellor: Would it not be advisable to arrange that all apprentices are deferred as well?
    Mr. Isaacs:That is quite another question.

    Skilled Men (Export Trades)
    Colonel Stoddart-Scottasked the Minister of Labour if he is aware that the call-up of skilled men in the under 30 age groups from firms engaged on export business, without adequate replacements, is detrimental to national interests; and will he issue instructions so that the withdrawal of labour from such firms will be suspended until the position in each case has been investigated.
    Mr. Isaacs: Call-up on the present scale is an essential part of the Government's demobilisation plans and the procedure already provides for cases to be investigated and considered on their merits. I am fully aware of the importance of expanding the export trade and special arrangements have been made for protecting it from making a disproportionate contribution.

  SCOTLAND

    Housing
    Mr. Snaddenasked the Secretary of State for Scotland what percentage of grants under the Housing (Rural Workers) Acts, were made in the counties of Perth and Kinross, respectively, up to the outbreak of war, to persons in respect of houses in which they themselves live as owners or by feu.
    The Joint Under-Secretary of State for Scotland (Mr. Buchanan): Approximately 3 per cent. and 5.5 per cent. of the grants made in the counties of Perth and Kinross, respectively, up to the outbreak of war were to persons in respect of houses in which they themselves lived as owner-occupiers.
    Mr. Hoyasked the Secretary of State for Scotland what steps he is taking to reorganise the Scottish Special Housing Association; and when a statement on the matter may be expected.
    Mr. Buchanan: I have had this matter under consideration and will make a statement as soon as I am in a position to do so.
    Mr. Kirkwood: Is not the Secretary of State of the opinion that this organisation is of no use to us in Scotland at all?
    Mr. Buchanan:I have been examining this matter since I took office. My hon. Friend must bear in mind that I am not the Secretary of State for Scotland. However, I have examined this matter myself and I hope, now that the Secretary of State will soon be returning, to be able to make a statement at an early date.
    Major Guy Lloyd: Is it not a fact that every organisation in Scotland that is in a position to build houses ought to receive every encouragement?
    Mr. Buchanan:Nobody dissents from that. The point is, is this the most effective body, and is it as effective as it should be? That is the issue, and I hope to make a statement on that at an early date.
    Mr. McKieasked the Secretary of State for Scotland if he will state the number of houses in Wigtownshire reconditioned under the Rural Housing Acts.
    Mr. Buchanan: At 30th June, 1945, the latest date for which figures are available, 116 houses had been reconditioned under these Acts in Wigtownshire.
    Mr. McKie: Is the hon. Gentleman aware that, although these figures are not good and much more might be done, the discontinuance of the assistance provided under the Rural Housing Acts in a poor rateable county like Wigtownshire may result in even worse housing conditions being available for the people?
    Mr. Buchanan: As an old Parliamentarian I cannot debate that question now. All I would say is that all of the 116 houses reconditioned in Wigtownshire were owned by landlords and not one by an owner-occupier.
    Mr. Kirkwood:Is not the Under-Secretary aware that this business is only a scientific method of subsidising the landlords?
    Lieut.-Commander Clark Hutchisonasked the Secretary of State for Scotland, what are the present numbers of completed temporary houses in the cities of Edinburgh, Glasgow, Aberdeen and Dundee, respectively.
    Mr. Buchanan: The numbers of temporary houses completed in Glasgow and Dundee are 55 and 6o respectively. No houses have so far been completed in Edinburgh and Aberdeen.
    Mrs. Jean Mannasked the Secretary of State for Scotland the number of temporary houses completed and occupied in Scotland at this date; the number expected to be in occupancy by 31st December; the number for 31st March 1946; and the proportion at each date allocated in Coatbridge.
    Mr. Buchanan: 255 houses have been completed. The Ministry of Works, who are responsible for the erection of these houses, estimate that by 31st December this number will have increased to 750 and by 31st March, to 5,000 houses. The corresponding figures for Coatbridge are nil; 5; and 50.
    Mrs. Mann:Will my right hon. Friend recognise that Coatbridge, on account of overcrowding figures and the number of houses unfit for habitation, deserves better treatment than that?
    Mr. Buchanan: When I saw the Question, I, too, was worried and I have asked my officials to examine the whole position again to see if we cannot improve it.

    Agricultural Executive Committees (Appeal Tribunals).
    Mr. Snaddenasked the Secretary of State for Scotland if he will state the composition of the appeal tribunals to be set up in connection with decisions of W.A.E.C.'s; and how soon they will be forthcoming.
    The Joint Under-Secretary of State for Scotland (Mr. Thomas Fraser): My right hon. Friend has decided that provision should be made in Scotland for appeals against recommendations involving the taking possession of agricultural land or the termination of tenancies. The Scottish Land Court have agreed to act in this matter and to make reports in such cases to the Secretary of State.
    Mr. Snadden: Does that Mean that Scottish farmers can now appeal to the Scottish Land Court right away?
    Mr. Fraser: Yes, Sir; indeed, some cases of dispossession in recent months have been held over in anticipation of this change of procedure.

    Agricultural Workers (Release)
    Mr. Snaddenasked the Secretary of State for Scotland how many releases under Class B in respect of agricultural

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    workers have been submitted by W.A.E.C.'s; how many have been forwarded by the Department of Agriculture; and how many have been granted.
    Mr. Fraser: Up to 22nd November, 638 recommendations for release had been received from Agricultural Executive Committees in Scotland. Of this total, 136 were found to satisfy the very stringent tests prescribed for the release of individual specialists under Class B, and were supported by the Department of Agriculture for Scotland, and 72 cases are still under consideration by the Department. Of the applications supported by the Department, 97 have so far been approved and seven rejected.
    Mr. Snadden: Will the Minister bear in mind that we are facing a world shortage of food, and, if food is as important as coal, will he not get more men out of the Forces under Class B in order to get on with the production of food?
    Mr. Fraser: I can assure the hon. Member that we are fully aware of the needs of agriculture.
    Mr. R. S. Hudson: May I ask the hon. Gentleman if he will compare those figures with similar figures given for a county of England, and if he will then say that he is really satisfied that his colleagues are doing everything that is required in present circumstances?
    Mr. Kirkwood: This is a Daniel come to judgment.
    Mr. Fraser: I have said that we are aware of the needs of the agricultural industry. Other Ministers are aware of the needs of the industries for which they have some responsibility. We are living in a time when there are many demands made on labour, and agriculture is taking its place along with the claims of other industries.
    Mr. Hudson: But is it not time something was done?
    Mr. Stubbs: May I point out to the Minister that, unless we do get the skilled men back to the land, there will be a considerable reduction in food production in this country next year?
    Mr. Maxton: Can the Minister tell us whether the strict definition of a specialist,
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    to which he has referred, was made by the Minister of Agriculture or by the Minister of Labour?
    Mr. Fraser: We are allowed to interpret it as we will, but we are subject to the quota limitation agreed by the Government.

    Outer Hebrides
    Mr. Malcolm MacMillanasked the Secretary of State for Scotland what specific schemes for hydro-electric development in each of the islands of the Outer Hebrides have been prepared.
    Mr. Buchanan: The North of Scotland Hydro-Electric Board have surveyed and prepared schemes for the distribution of electricity in Lewis, Harris, North Uist, Benbecula, South Uist, Eriskay and Barra. In Lewis and Harris five waterpower projects have been surveyed, but some technical, economic and fishing difficulties remain to be overcome. In the other islands, there is very little water power available and some of the necessary power production may be from oil engines.
    Mr. MacMillan: May I thank the Scottish Office for this commendable exhibition of getting on with the work?
    27.Mr. M. MacMillanasked the Secretary of State for Scotland whether he is aware of the bad condition of many roads serving agricultural communities, including Department of Agriculture settlements in the Outer Hebrides, and which were built partly by the free labour of the tenants and left to them for all future maintenance; and whether, in view of modern needs and traffic, it is the intention of the Department to reconstruct these roads; and if he will state the financial arrangements.
    Mr. Fraser: As in other parts of the country, road work in the Outer Hebrides has necessarily been held up on account of war conditions, and I am aware that some roads serving agricultural communities there are not in good condition. Improvement works on the Secretary of State's properties are being undertaken as conditions permit, and, in regard to roads serving other properties, the Secretary of State is prepared to consider applications from the County Council for assistance.
    Mr. MacMillan: May I ask if my hon. Friend is aware that I have been asking for 10 years, and previous hon. Members for the Western Isles have been asking for many more years, that this should be treated as a matter of extreme urgency, and if he is aware that we are tired of this suggested danger of continuity of policy from the last Government, of free labour by the local people and other vicious practices applying to labour conditions?
    Mr. Fraser: I am aware that these conditions leave much to be desired, but we have not been a Government for very long—[Laughter]—though much too long for the comfort of many hon. Members opposite. The position surely is that I had to report the conditions as they exist today, and I had to state that, so far as roads other than those on properties owned by the Secretary of State are concerned, the county councils have some responsibility.
    Mr. MacMillan: Will the hon. Gentleman give us an assurance that he will bring every pressure to bear wherever necessary upon reactionary Conservative local authorities?
    Mr. M. MacMillanasked the Secretary of State for Scotland if he is aware of the inconvenience and hardship endured by the people of Bernera Island, Lewis, through having to leave the local omnibus at Earshader Sound, ferry their goods and themselves to their home island and carry their goods for miles to their homes, owing to lack of a short viaduct; and whether the Department of Agriculture is prepared to assist in the provision of a viaduct.
    Mr. Fraser: As my hon. Friend is aware, the provision of a viaduct was the subject of correspondence between the Department of Agriculture for Scotland and the County Council of Ross and Cromarty in 1939. On the outbreak of war the Council decided to defer further action, and so far have not again approached the Department.
    Mr. Macmillan: May I ask the Minister to look upon this case as possibly the most urgent case in the West of Scotland in regard to transport, and as one most deserving of assistance from the Scottish Office and the Ministry of War
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    Transport? Will he look most carefully into it and urge the local authority that it is most urgent that they should get on with the job?
    Mr. Fraser: I would like very much to see something being done, but I am not so sure that, since we are not the highway authority, we can ask the local authority to get on with the job. If they make a submission, we will be very pleased indeed to look into it.

    Mr. Douglas Young (Protest)
    Mr. Stephenasked the Secretary of State for Scotland on what grounds Mr. Douglas Young has been denied the right of Protestation for Remied of Law guaranteed by Article XVIII of the Treaty of Union; and whether he will take the necessary steps to secure for Mr. Young his rights in this connection.
    The Lord Advocate (Mr. G. R. Thomson): Mr. Young was convicted in the Sheriff Court at Paisley on 12th June, 1944, on a charge of contravening Regulation 8os of the Defence (General) Regulations. He appealed to the High Court of Justiciary and his appeal was dimissed on 6th October, 1944. He presented a protest for Remied of Law purporting to proceed in virtue of an Act of the Scots Parliament of 1695. The Secretary of State refused to entertain his protest as the law is clear that there has never been, whether before 1707 or afterwards any appeal from the Court of Justiciary to Parliament.

    Self-Government
    Mr. Stephenasked the Secretary of State for Scotland whether he will move to appoint a Select Committee to consider measures for the restoration of self-government to Scotland, and to secure the observation of all Scottish rights guaranteed by the Treaty of Union.
    Mr. Buchanan: I would refer my hon. Friend to the reply, of which I am sending him a copy, given by the Prime Minister on 10th October to a question asked by the hon. and gallant Member for Perth (Colonel Gomme-Duncan).
    Mr. Stephen: Will the hon. Gentleman, in view of his own excellent record in this matter, make representations to the Prime Minister that something must be done to restore self-government to Scotland?
    Mr. Buchanan: All that I can say is that, since my hon. Friend has known me long enough, he must not give me a lift, as he is doing out of friendship, and suggest that I have got that amount of influence with the Prime Minister.

    Boarded-Out Children
    Mr. Willisasked the Secretary of State for Scotland if his attention has been drawn to the recent case in which four children were boarded out with a family of seven occupying a room and kitchen and, after six weeks, were found to have been underfed, neglected and dirty; and will he consider what steps can be taken to prevent any recurrence of such cases.
    Mr. Buchanan: Yes, Sir. I have called for a full report by my inspectors on the arrangements of the voluntary society who were responsible in this case. Meantime, the society have at my request arranged that no further cases will be handled by the agent concerned until the report has been fully examined. I am also bringing the case to the notice of the committee on the care of homeless children.
    Mr. Willis:May I ask my hon. Friend whether any action is being taken to prevent similar cases occurring with other charitable organisations?
    Mr. Buchanan: May I say that of all the questions I have had to deal with since I took office, this one possibly has given me more worry than any other. I can tell my bon. Friend that, so far as the Scottish Office is concerned, we are taking every possible step not only in regard to voluntary bodies but also to public authorities to see that there is no abuse of children.

    Aged Persons (Housing and Care)
    Mr. Rankinasked the Secretary of State for Scotland what action he proposes to take to deal with the location of institutions for the aged; the rules and regulations governing these institutions; the provision of adequate and up-to-date recreational facilities within them; research into the diseases associated with old age; and a new approach to the housing of the aged.
    Mr. Buchanan: Our aim is to provide accommodation for old people in houses, in comfortable old people's homes and in hospitals according to what is most suit-
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    able for their individual needs. Local authorities are encouraged to make special provision for old people in their housing programmes and some have already done so. Other developments will depend on what can be done by way of new building and in part on future social service legislation.
    Mr. Rankin: Arising out of that answer, for which I thank the hon. Gentleman, may I ask if in the meantime he could do anything to ensure that the restrictive practices at present in operation in many of the Poor Law institutions will be made a little easier for the aged people?
    Mr. Buchanan:If my hon. Friend can tell me of any Poor Law authority which treats old people badly, I shall be very pleased because, in these enlightened days, I am sure none of us would wish to see old people treated badly.
    Mr. McAllister:Will the hon. Gentleman urge on local authorities the necessity for not segregating old people into special little communities?
    Mr. Buchanan: It is purely a matter for local government. On the whole, local government tends nowadays to treat old people well, but if there are any suggestions which I can safely convey to the local authorities to have old people more decently treated, if hon. Members will let me have them, I shall be at all times ready to approach the local authorities.
    Mr. Rankin: Is the hon. Gentleman aware that I am not suggesting that treatment in any of these institutions is bad, but that the rules and regulations in many of them are restrictive in their operations so far as the aged people are concerned?
    Mr. Buchanan: Hon. Members must be aware that we are not a town council; we are Parliament, and these rules are made by democratic local authorities. The advice I give to my hon. Friend is to see that the appropriate people arc elected to the town councils.
    Sir William Darling: Would the hon. Gentleman consider giving a double bounty on the building of houses for old age pensioners and old people? That would be a practical proposition.

    Nursing Service
    Mr. Cook: asked the Secretary of State for Scotland if he is aware of the

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    shortage of nurses in sanatoria in Scotland; and what steps he proposes to take to overcome this shortage.
    Mr. Buchanan: Yes, Sir:. To help to meet the shortage tuberculosis nursing continues to be accorded the highest priority. The Government hope that following the recent statement on the staffing of hospitals and the improvement in rates of pay for nurses which will come into operation early next year, many more persons will enter the nursing profession. In the meantime, all practicable means will continue to be used to increase the nursing staffs of tuberculosis institutions.
    Mr. Cook: Is the Minister aware that the rates at present in operation in this sphere of work are not sufficiently attractive in the widest sense to encourage people to enter this profession?
    Mr. Buchanan: As my hon. Friend knows, a Committee presided over by Mr. John Wheatley recently reported. We accepted immediately every one of the recommendations and, indeed, on one suggested an improvement. We hope that these increases, which are fairly good, will attract nurses. May I add, however, that I wish wages were the only problem in nursing, but I am afraid there are deeper social problems involved.
    Mr. Gallacher: Is the Under-Secretary aware that there is a tendency on the part of nurses to refrain from going to sanatoria because of the fear of infection? Would he make it clear that every possible step is taken to ensure that nurses going into these sanatoria will be fully protected against any danger that may arise?
    Mr. Buchanan: I have no hesitation in giving my hon. Friend the assurance for which he asks.

    Tuberculosis
    Mr. Cookasked the Secretary of State for Scotland if he will take steps to increase the allowances to patients receiving domiciliary and institutional treatment for tuberculosis under the Tuberculosis Scheme.
    Mr. Buchanan: Provision for disability generally is being considered as part of the forthcoming National Insurance Scheme, and I would ask my hon. Friend to wait for the introduction of the Bill dealing with that subject.
    Mr. Cookasked the Secretary of State for Scotland if he will state the number of tubercular cases awaiting admission to sanatoria; the number at present receiving treatment; and the number of beds available in these sanatoria.
    Mr. Buchanan: At 30th June, 1945, the latest date for which information is available, local authorities in Scotland had 1,898 tubercular patients on their waiting lists, and 5,470 patients under institutional treatment. The total number of beds available is approximately 6,700. The difference is accounted for mainly by the number of beds, estimated at 500, for which no nurses are available, and the number of beds in private sanatoria.

    Water Rating Committee (Report)
    Major Ramsayasked the Secretary of State for Scotland whether he will inform the House as to the date by which the Scottish Water Rating Committee will publish its Report.
    Mr. Buchanan: The Committee have not yet submitted their report to the Secretary of State. As soon as they do so the question of publication will be considered.
    Major Ramsay: Will the report be printed by 4th December, when the Scottish Water Bill will come before this House?
    Mr. Buchanan: It must be obvious to the hon. and gallant Member that it cannot. The Committee have not reported to us yet, and it is now almost the end of November. When the Committee does report, it is for the Secretary of State for Scotland to say when the report can be printed.

    Regional Planning
    Mr. McAllisterasked the Secretary of State for Scotland if he will state the degree of co-ordination now achieved on the siting of housing estates and the siting of trading estates; and how many plans for the creation of new towns and the extension of small existing towns have resulted from this co-ordination.
    Mr. Buchanan: The arrangements made by the Department of Health for Scotland with the Board of Trade and other Departments concerned ensure the fullest co-ordination in the siting of housing and industrial estates. The planning implications of all schemes are examined by the Department of Health, who are also con-

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    sulted about the detailed layouts. Plans for the creation of new towns and the extension of existing towns are being considered by the Regional Planning Advisory Committees in consultation with the Departments concerned.
    Mr. McAllisterasked the Secretary of State for Scotland, if he intends to establish a planning committee for the whole of Scotland to co-ordinate the work of the South-east and South-west Regional Planning Committees and any other regional committees that may be appointed.
    Mr. Buchanan:As at present advised, my right hon. Friend does not consider this step necessary. The Regional Planning Committees are fully alive to the need for co-ordinating their work and maintain close contact with one another for this purpose. Any further co-ordination that may, at any time, be necessary will be effected by my right hon. Friend in the discharge of his planning functions.

    Planning and Development
    Mr. McAllisterasked the Secretary of State for Scotland what steps he is taking to co-ordinate the development of hydro-electricity, industry, agriculture, housing, the tourist industry and the creation of new towns in the Highlands of Scotland; and if it is his intention to establish a North of Scotland planning committee to discharge this function.
    Mr. Buchanan: It is the duty of my right hon. Friend in the exercise of his various statutory responsibilities in planning and other fields to secure the coordination of all forms of development; and this responsibility could not—as suggested in the second part of the Question—be delegated to a committee. My right hon. Friend is in continuous touch with the Scottish Council on Industry and arrangements exist for full consultation between him and the other Ministers concerned.
    Mr. McAllister: Does not the Under-Secretary agree that the recent Debate on the North of Scotland Hydro-Electricity Bill showed the greatest discontent on all sides of the House with regard to the future of the Highlands of Scotland, and that the absence of any co-ordinated plan for the Highlands is jeopardising the whole future of the people?
    Mr. Buchanan:My right hon. Friend the Secretary of State thinks that he has now full control over the necessary planning and that the mere setting up of another Committee would not improve it or make the position any better.
    Mr. McAllister: Does not the Under-Secretary think that that is rather a reflection on the two Regional Committees already appointed by the Secretary of State for Scotland to suggest that such a committee is a mere committee?
    Mr. Buchanan:I do not reflect in the slightest on them. All I am anxious to say is that we already have two Committees, and the setting up of a third is not going to help the position. I think those two Committees are capable of doing their work, and that with the co-ordination of the Secretary of State no further Committee is required.
    Mr. McAllister: I wish to give formal notice that I shall raise this matter on the Adjournment.

    Smallholdings
    Mr. Prydeasked the Secretary of State for Scotland how many applications for smallholdings are now before his Department; and when he anticipates being able to make a statement of Government policy on this subject.
    Mr. Fraser: The number of applications for smallholdings outstanding at 31st October, 1945, was 10,370, but a large proportion of these are likely to be ineffective for various reasons. My right hon. Friend has the Report of the Scottish Land Settlement Committee before him but I cannot yet say when it will be possible to make a statement on future policy.

  GOVERNMENT DEPARTMENTS

    Research Work
    Mr. Cobbasked the Lord President of the Council the number of Government establishments, excluding the Post Office, which carry out research; and the total number of physicists or qualified engineers employed by these on pure research and applied research respectively.
    The Lord President of the Council (Mr. Herbert Morrison):Practically every Government Department is concerned to some extent, either directly or indirectly, with research work. Complete figures are not

    1071
    available but, excluding the Post Office, there are upwards of 9,000 qualified engineers and over 1,300 physicists in Government service. I am afraid that it is quite impossible to answer the last part of my hon. Friend's question. The duty of many research workers involves both fundamental and applied research at the same time.
    Mr. Cobb: Is the right hon. Gentleman satisfied that we are doing enough about research, and, if the answer is in the negative, can he say whether he will shortly be in a position to state what the Government's future plans are on this matter?
    Mr. Morrison: I think it would be a bold thing to say that we are doing enough in the direction of research. It is occupying the mind of the Government, and improvements are being planned. As and when they arrive, I will inform the House.

    Unstamped Letters
    Mr. Keelingasked the Chancellor of the Exchequer how far it is the practice of a Government Department which receives an unstamped letter marked "O.H.M.S." from a member of the public to collect the postage from him subsequently.
    The Chancellor of the Exchequer (Mr. Dalton): Departments do not normally take steps to collect from members of the public postage and surcharge on unstamped letters marked "O.H.M.S." which are addressed to them. But, if this practice were to become widespread such steps would be taken.
    Mr. Keeling: Does the right hon. Gentleman's answer mean that the privilege given us the other day of leaving our letters to Government Departments unstamped is already enjoyed in practice, and in fact, if not in theory, by every member of the public?
    Mr. Dalton: No, Sir. It means nothing of the kind.

    Stationery (Consumption)
    Lieut.-Colonel Sir Thomas Mooreasked the Financial Secretary to the Treasury what was the total amount of writing paper and envelopes consumed by the various Departments of the Government during the latest months for which figures are available; and how this
    1072
    quantity compares with the amount issued by the Stationery Office for the use of Members of Parliament during the same period.
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): For the three months ended 30th June, 1945, the value of supplies to Government Departments of all kinds of writing paper and envelopes was approximately £320,000. During the same period the value of supplies to the House for the use of Members was approximately £200.
    Sir T. Moore: While not criticising the quantity or the cost of paper issued, could the hon. Gentleman do something to equalise the quality of paper, so as to enable the House of Commons paper to keep the ink on one side of the paper?
    Mr. Hall: That question should be addressed to another Department, not to the Treasury
    Sir T. Moore: No, Sir. I have gone into this matter very thoroughly, and I was told, or advised on the highest authority, that the hon. Gentleman was responsible for this matter.
    Mr. Hall: I understand there is a committee which looks after the stationery of the House. In so far as the Treasury is concerned, I will certainly look into the matter.
    Mr. Kirkwood: Seeing that the Minister has been instructed to look after it, will he take the job on and rectify the mistake?

  GERMANY

    De-Nazification
    Mr. George Thomasasked the Chancellor of the Duchy of Lancaster if he is satisfied that de-Nazification of Germans in the British zone of occupation is not impeded by the fact that roughly 80 per cent. of the teachers employed in the German schools by the Nazis are now employed under our authority.
    The Chancellor of the Duchy of Lancaster (Mr. John Hynd): I am not able to say what is the percentage of former teachers who are now employed, but I am assured that the figure is nothing like that suggested in the Question. The task of de-Nazifying the German educational system is a formidable one, but accord-

    1073
    ing to the latest information the number of teachers employed by Nazis who have been arrested, dismissed or otherwise refused employment by Military Government is about 11,567, and the number whose cases are still under consideration by Military Government and who are consequently not employed is about 14,530. No teacher is employed in the British Zone whose connection with National Socialism is known to have been other than nominal, and the continued employment of approved teachers depends on their loyal observance of the regulations laid down by the British military authorities.
    Mr. Thomas: Is the hon. Gentleman aware that this was the figure given to the Members of Parliament who recently visited the British zone of occupation in Germany, and this figure was given to us authoritatively and definitely by the general in charge?
    Mr. Hynd: The information I have given in the answer to the Question are authoritative figures given by the authorities in Germany up to date.

    Hamburg (Military Government)
    Mr. Prittasked the Chancellor of the Duchy of Lancaster for what reason the majority of the higher officials of the present Hamburg police force are persons falling under either CI compulsory arrest or CI compulsory investigation category; what is the present policy for the elimination of such persons from office; and why their presence is allowed.
    Mr. J. Hynd: I cannot accept the statement that the majority of the higher officials of the Hamburg police force are persons falling within either the compulsory arrest or the compulsory investigation categories. Close inquiries have been made, but there is no evidence of any person within the compulsory arrest category being employed in the Hamburg police force. A number of members of the police do fall within the compulsory investigation category for reasons other than membership of the Nazi Party, and their cases are being investigated as expeditiously as possible by the Security Authorities. The policy is to arrest immediately all falling within the compulsory arrest category, and I am satisfied that this policy is being carried out.
    Mr. Pritt: Can the Minister tell us why the reports mentioned in subsequent Questions, and Questions put down for subsequent dates, contain so many detailed statements about persons who fall within those categories?
    Mr. Hynd: I am afraid that I cannot say why that information is in those subsequent Questions. They will be dealt with as they come along.
    Mr. Prittasked the Chancellor of the Duchy of Lancaster, for what reason the Military Government in Hamburg is employing Lieut.-Colonel Wömper, formerly a Nazi Party member and Major of the Orpo and an S.S. Obersturmbannführer, in command of Group East, Hamburg; and if, as this man falls within the category of CI compulsory arrest or CI compulsory investigation, he will give directions for his immediate replacement from among the available anti-Nazi Germans.
    Mr. J. Hynd: Womper is no longer employed by Military Government, Hamburg. He was dismissed on 12th November as a borderline case. I am advised that he was neither a Nazi Party member and Major of the Orpo, nor an S.S. Obersturmbannführer, neither was he in the CI compulsory arrest or CI compulsory investigation categories.
    Mr. Pritt: Can the Minister tell me whether this man was dismissed after my Question was put down, and why was he dismissed?
    Mr. Hynd: He was dismissed on 12th November as a borderline case. The position is that those who come within the compulsory arrest category are immediately arrested; certain cases of denunciation and otherwise are regarded as cases of investigation, and this was regarded as a borderline case.
    Mr. Prittasked the Chancellor of the Duchy of Lancaster for what reason the Military Government in Hamburg is employing Lieut.-Colonel Eckmann, formerly a Nazi Party member, an S.S. Obersturmbannführer, Chief of Staff of the Hoehere S.S. and Polizeiftührer Nordsee, who was personally promoted to high rank by Himmler, in the capacity of Chief of Staff of the Schutzpolizei and second in command of the Hamburg Police Force; and if, as this individual falls within the category of CI compulsory arrest or CI

    1075
    compulsory investigation, he will direct his immediate replacement from among the available anti-Nazi Germans.
    Mr. J. Hynd: Eckmann is no longer employed by Military Government, Hamburg. He was dismissed on 12th November as a borderline case. I am advised that he was neither an S.S. Obersturmbannführer, nor a Chief of Staff of the Hoehere S.S. nor a Polizeiführer Nordsee; and he was not second in command of the Hamburg Police Force before our occupation; he could therefore not have been promoted to these positions by Himmler. He did not fall either within the CI compulsory arrest or CI compulsory investigation categories.
    Mr. Pritt: Does not the Minister think that if I continue to put down Questions, and he continues to co-operate in this way, the police force will be a much better organisation?

  DOG LICENCES
  Captain Crowderasked the Chancellor of the Exchequer if he will consider amending the present regulations with regard to the date of expiry of dog licences so that they will be valid for a period of 12 months from the date of issue, instead of lapsing automatically on 31st December each year.
  Mr. Dalton: This is a local taxation duty in England and Wales, though an Imperial duty in Scotland. The change suggested by the hon. and gallant Member would complicate administration, and I am not prepared to consider legislation unless it were supported by the local authorities.

  CIVIL SERVICE

    Temporary Civil Servants (Release)
    Mr. Braddockasked the Chancellor of the Exchequer if he will consider setting up a demobilisation scheme for temporary civil servants based on age and length of service, so as to enable those so employed to have information as to when they may expect release.
    Mr. Dalton: No, Sir. Arrangements have already been made through the Whitley Councils for settling the order of discharge of staff in Departments where redundancy exists. In other cases there
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    is provision for representation to be made by staff who have special reasons for wishing to leave Government employment.

    Temporary Clerks (Qualifying Service)
    Mr. Sidney Marshallasked the Financial Secretary to the Treasury whether he is aware that candidates over 30 years of age seeking posts as temporary clerks in the Civil Service are required to have a qualifying period of five years' continuous service with a Department but that service with the Forces or Merchant Navy immediately prior to application would be deemed part of the qualifying period; whether service with the N.F.S. is recognised as a qualifying period; and if not, whether he will issue instructions that it be so regarded.
    Mr. Glenvil Hall: I would refer the hon. Member to the answer which I gave to the hon. and gallant Member for Brixton (Lieut.-Colonel Lipton) on 29th October.

    Temporary Service (Pensions)
    Sir Frank Sandersonasked the Financial Secretary to the Treasury whether he is aware that there are civil servants who have 25 years service of which the first 10 years, temporary, service is regarded as counting for pension, but under the present regulations counts only two years and 10 months; and in view of this will he consider moving for a Select Committee to consider the question of counting temporary service for pensions.
    Mr. Glenvil Hall: Following the recommendation of the Royal Commission on the Civil Service 1929–1931, Section 3 of the Superannuation Act 1935 provides broadly that temporary service reckons as to one half for pension. I see no reason for the appointment of a Select Committee.
    Sir F. Sanderson: Is the hon. Gentleman aware that there is a good deal of resentment at temporary service not being regarded for pension, and would he give this matter serious consideration?
    Mr. Hall:The matter has been under consideration many times, and more recently this House agreed to a White Paper which set forth the policy to be followed when the war came to an end. That was agreed to not only by the House, but by both sides of the Whitley Council.

  GOVERNMENT BORROWING (NEW PROPOSALS)
  Mr. Ernest Daviesasked the Chancellor of the Exchequer whether he has any statement to make on his intentions regarding future Government borrowing.
  Mr. Dalton: Yes, Sir. I propose to discontinue the sale of2½ per cent. National War Bonds, 1954–56, and 3 per cent. Savings Bonds, 1965–75, after Saturday, 15th December. For the present I do not propose to replace these by other issues.
  I propose to repay the 2½ per cent. Conversion Loan, 1944–49, on 1st April, 1946, and tire 2½per cent. National War Bonds, 1945–47, on 1st July, 1946. Holders of either of these Loans will, however, be given the option of converting their holdings as on 1st April, 1946, into 1¾per cent. Exchequer Bonds, 1950, on the same terms as the existing issue of these Bonds, carrying a payment of six months' interest on 15th August, 1946. This offer will close on or before 25th February, 1946. Full particulars will be posted in clue course to the holders concerned. The present issue of 3 per cent. Defence Bonds will continue and the maximum holding for any one person will be raised from £1,500 to £2,000 as from 17th December, 1945.
  I do not propose any change in the terms of Savings Certificates or in the rate of interest paid on deposits in the Post Office Savings Bank or in the Ordinary Departments of Trustee Savings Banks, but a limit will be imposed at an early date on the total deposits of any one person.
  Mr. Davies: May I ask the right hon. Gentleman whether, in view of his welcome announcement of the reduction of the rate of interest, he envisages further financial controls, and, if so, when he proposes to institute them?
  Mr. Dalton: We advance step by step in such matters. I think that the step taken today is beneficial from the point of view of reducing the burden of the debt and lowering the cost of borrowing. Other things may come later.
  Mr. Gallacher: Is not the Chancellor of the Exchequer aware that it would be a very bad policy for a housewife to borrow money while she has resources in
  1078
  the house, and will he strip the parasites of all their wealth before he starts borrowing money from the pals of the parasites?

  PENICILLIN (PUBLICITY)
  Sir Wavell Wakefieldasked the Minister of Information if he is aware that foreign countries, and in particular Norway, are importing penicillin from the U.S.A. under the impression that penicillin is an American invention produced only in the U.S.A.; and what steps are being taken to correct an impression harmful to our own export trade.
  The Minister of Information (Mr. E. J. Williams): My right hon. Friend the Minister of Supply tells me that production of penicillin in this country does not yet allow of export to any considerable extent. Meanwhile, the British discovery and early development of the drug, which gained the award of the Nobel Prize for Medicine, has been widely publicised abroad, both by the Ministry of Information and by the British Council.
  Sir W. Wakefield: Could the Minister say what steps he is now taking to give wider publicity and further information abroad to those countries which are improperly informed on this matter? Are any people sent abroad to explain the position?
  Mr. Williams: I am informed that Professor Flory has recently visited Sweden and Denmark, that Dr. Garrod has visited France and Belgium, and Professor Fleming has visited Moscow. We are circulating a large number of technical journals about the matter.
  Mr. J. Lewis: Is there any truth in the statement made recently that penicillin has been synthesised in this country?
  Mr. De la Bère: Why hide our light under a bushel?

  B.B.C. (MINISTERIAL STATEMENTS)
  Mr. Hurdasked the Minister of Information whether it is Government policy to give directives to the B.B.C.; whether it was on his instructions that on Thursday, 22nd November, the series of fortnightly farming discussions under the chairmanship of Professor Sanders of Reading University was broken in order

  1079
  to provide time for the Minister of Agriculture to speak on agricultural policy; and why time for a short statement by the Minister of Agriculture was not found after an evening news bulletin or in the "Farming Today" period, on the following Thursday evening, without interrupting this discussion series which has been widely advertised.
  Mr. E. J. Williams: The answer to the first and to the second part of the Question is, No, Sir. The answer to the third part is that it was considered that a Ministerial statement intended mainly for the farming community was best given at a time normally devoted to a farming broadcast.
  Mr. Hurd: Is the House to understand that this change in the advertised programme of the B.B.C. was made entirely by the free choke of the B.B.C.?
  Mr. Williams: I understand that my right hon. Friend the Minister of Agriculture considered that the fanning community would wish to hear his explanation of this important statement of policy at the earliest convenient opportunity, and he informed me so. I think hon. Members will agree that a statement of national policy of this kind ought to take priority over anything else.

  TELEVISION ADVISORY COMMITTEE (APPOINTMENT)
  Mr. Ernest Daviesasked the Minister of Information whether he is yet ready to make a statement on the setting up of a Television Advisory Committee as envisaged in the Hankey Report on Television.
  Mr. E. J. Williams: Yes, Sir. I have set up a Television Advisory Committee of representatives of the interested Government Departments and of the B.B.C. empowered to consult with representatives of industry as necessary. The Chairman is Mr. G. M. Garro Jones and I am circulating in the OFFICIAL REPORT a note of the Committee's composition and functions. I have asked the Committee to press ahead with plans for the re-starting of the London Television Service and for the extension of the service to the Provinces.
  Mr. Davies: Will my right hon. Friend consider giving instructions to his com
  1080
  mittee as to the priorities they should consider, that is, whether the question of the finance of television or the question of research should be considered first? Further, will they report to him or to the Postmaster-General?
  Mr. Williams: So far as the last part of the supplementary question is concerned, they would, of course, report to me. As regards the first part of the question, I think my hon. Friend will find, if he looks up the note on the definition of the functions of the Committee which I have approved, that that point is fully covered.
  Mr. Cobb: Is my right, hon. Friend aware that unless this matter is pushed forward with the greatest urgency we shall lose the export business in television to America?
  Mr. Williams: I agree, and I am pressing forward with it.
  Following are the Committee's composition and functions:
  1. The Television Advisory Committee has been set up by the Minister of Information, in his capacity as the Minister at present responsible for the television services. Its composition is as follows:
  Chairman: Mr. G. M. Garro Jones.
  Treasury: Mr. R. J. P. Harvey.
  Post Office: Colonel Sir Stanley Angwin, Mr. H. Townshend.
  Board of Trade: Mr. H. A. Binney. Ministry of Supply: Mr. E. B. Bowyer.
  Department of Scientific and Industrial Research: Sir Edward Appleton, Mr. 0. F. Brown.
  Ministry of Information: Mr. E. St. J. Bamford, Mr. H. G. G. Welch.
  British Broadcasting Corporation: Mr. W. J. Haley, Sir Noel Ashbridge.
  The Acting Secretaries of the Committee are Mr. G. Kirk (Ministry of Information) and Mr. H. D. Bickley (Post Office).
  2. The Minister of Information has approved the following definition of the functions of the Committee:
  The Television Advisory Committee will advise the responsible Minister on television policy with particular reference to the following points:

  (a)the planning, after consultation with industry, of the future television service, including the standards to be adopted;

  1081

  (b)the co-ordination and, where necessary, the initiation of research into the principles and practice of television;

  (c)the encouragement of pooling of television patents and their use in the national interest;

  (d)the investigation of all developments on television at home and abroad, including its use for cinemas, bearing in mind the importance of the export trade and the desirability of the adoption of international television standards.

  BRITISH ARMY

    Divorce Proceedings
    Mr. Sparksasked the Secretary of State for War in view of the congestion and long delay in proceedings for divorce promoted by Servicemen through their commanding officers, if he will take steps to expedite proceedings to enable Servicemen to re-establish a home for themselves at the earliest possible moment.
    The Secretary of State for War (Mr. Lawson): I would refer my hon. Friend to the reply I gave on 13th November to my hon. and gallant Friend the Member for Stockton-on-Tees (Capt. Chetwynd).

    Commandos (Disbandment)
    Major Tufton Beamishasked the Secretary of State for War for what reasons the Army Commandos have been disbanded and whether any arrangements are being made for a stand-down parade.
    Mr. Lawson:As I explained on 25th October, in reply to a Question my my hon. and gallant Friend the Member for Aston (Major Wyatt), it is impossible for the Army to retain in peace-time specialised units such as the Commandos, owing to the reduced man-power available. No arrangements have been made for a stand-down parade.
    Major Beamish: Will the right hon. Gentleman tell the House why this superb voluntary force, in which 57 regiments and corps were represented on D Day, is just being faded out as though we were ashamed of them? Will he see that an arrangement is made for a stand-down parade, so that they can go out at least with flying colours?
    Mr. Lawson: Yes, I quite understand the very strong feeling and sentiment about this unit. All I can say is that it will receive consideration in connection with the Victory March later on.

    Palestine Service (Allowance)
    Sir T. Mooreasked the Secretary of State for War whether all officers of units sent to Palestine on duty receive an allowance to cover the provision of the necessary tropical kit; and what is the amount of the grant.
    Mr. Lawson: Officers receive a grant of £10 for this purpose when ordered to proceed to Palestine on duty, unless they have previously served at a tropical station during the present emergency or have already received an outfit allowance which covers the provision of tropical kit.
    Sir T. Moore: Does this apply to Regular officers as well as Territorial and 'general officers?
    Mr. Lawson: The question is rather a general one. I would not be prepared to particularise.
    Sir T. Moore:I must communicate with my right hon. Friend afterwards.

    Army Council
    Mr. Dribergasked the Secretary of State for War how many members of the Army Council are more than 60 years of age.
    Mr. Lawson: Three, Sir.

    O.C.T.U. Courses
    Major Wyattasked the Secretary of State for War whether there has been any modification in the syllabus of O.C.T.U. courses since VJ-Day.
    Mr. Lawson:Yes, Sir. They have been modified to meet the requirements as they now exist. Some subjects, essential as preparation for imminent battle, have been omitted to allow more time for problems of general administration, man-management and recreational training.
    Mr. Evelyn Walkden: Could my right hon. Friend say whether there is a modification of the period? Are there now 14, 16 or 18 week courses?
    Mr. Lawson:No, I could not say without notice.

    New Commissions
    Major Wyattasked the Secretary of State for War how many new officers have been commissioned in the six months since VE-Day after attending O.C.T.U.s and without attending O.C.T.U.s, respectively; and how many new officers were commissioned in both categories in the six months immediately preceding VE-Day.
    Mr. Lawson: In the six months ended 3rst October, 7,221 commissions were granted, made up of 4,020 from O.C.T.U.s, 1,742 direct from the ranks, and 1,459 from civil life. In the preceding six months the corresponding figures were 8,780, 6,421, 1,373 and 986. Officers commissioned direct from civil life are normally qualified professional men or specialists, for example, doctors, chaplains and civil affairs officers.
    Major Wyatt: Could the right hon. Gentleman explain why there has been a big drop in commissioning officers since VE-Day in view of the fact that there has been delay in the release of groups 21 and 24?
    Mr. Lawson: No, I could not say without notice.

GASWORKERS' STRIKE, LONDON
Mr. Eden: In accordance with what the right hon. Gentleman the Minister of Labour said yesterday, may I repeat the Question I put then, slightly modified in view of changed circumstances, and ask the Minister of Labour whether he has any statement to make about the strike of gasworkers in the London area, and what steps are being taken to restore supplies of gas for the public?
Mr. Isaacs: This strike arose out of a claim by the men for a special enhanced rate for night shift working, notwithstanding that the existing shift work rates take account of all the circumstances attendant on shift working. The National Joint Industrial Council for the Gas Industry by means of a special committee, have been engaged in a comprehensive review of all the terms and conditions of employment of gasworkers, and I am informed that it is hoped that at a meeting of this committee on Friday next, they will be in a position to present a report to the full 1,iational Council. It is, therefore, particularly unfortunate
1084
that this stoppage should have occurred at the present time. I am glad to say that work was resumed on the night shift yesterday at the gasworks affected. In view of the satisfactory result of the efforts of the trade union, I do not wish to say anything on the issues involved, but I feel bound to express my profound regret at the hardship and inconvenience caused to consumers by the action of the strikers. The workers of this industry in all parts of the country must recognise their special Obligations to the rest of the community, and must refrain from precipitate or unconstitutional action likely to create embarrassment and difficulty to the public at large.
Mr. Kirkwood: Does not the right hon. Gentleman think that it is because the machinery for negotiating complaints is out of date that the trouble was caused? It is not that the workers desire to shirk their responsibility. The ruling class of this country have always shirked their responsibility. I want to ask the Minister if this is not what is behind it, that the workers have a case, and that it is time the trade union movement recast the negotiating machinery?
Mr. Isaacs: I am afraid that, in answer to a question, I could not cover all the ground referred to by the hon. Member, but I do not accept the point of view that the trade union machinery is out of date. I have had a great deal of experience of that machinery, and I feel quite satisfied that if people not directly concerned in this industry would keep their fingers out of the pie, we could get this matter settled.
Mr. Maxton: Would the Minister be prepared to recognise that there is some social value in a stoppage which teaches us all how dependent we are on these workers for our day-to-day comfort?
Mr. Kirkwood: I would like to see some Members opposite working in a gasworks.
Mr. Sydney Silverman: Would my right hon. Friend care to add a word to the statement he has already made about the most unfortunate letter written by the gas company to the workers, which had the effect of precipitating the stoppage?
Mr. James Hudson: On that point, would the Minister agree that it is not only the trade union machinery that comes under review, but that it is the machinery

1085
of the employers which would allow them to write such a letter in so dangerous a situation?
Mr. Isaacs: I think, in view of the fact that this council is making its report on Friday of this week, that the best thing we can do is to avoid saying anything which may stir up further trouble. Men do not go on strike as a kind of flash in the pan, just because they want to go on strike. There are grievances behind every action which the men take, and the only thing I regret in this particular case is that the machinery of their own acceptance was in fact in operation. They might have waited two or three days more.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: I think this is a case in which the least said the soonest mended.

STAKEHILI, DETENTION BARRACKS (INQUIRY)
Mr. Driberg(by Private Notice) asked the Secretary of State for War if, in view of the allegations newly communicated to him by the hon. and gallant Member for Aston (Major Wyatt) concerning a second fatality in Stakehill Detention Barracks, he will reconsider his decision that the court of inquiry into conditions in these barracks should be held in secret and should be exclusively military in its composition.
Mr. Lawson: In the case of the fatality referred to by the hon. Member, which took place some 15 months ago, the coroner decided that no inquest was necessary. I see no reason to reconsider my decisions as to the composition and procedure of the forthcoming court of inquiry.
Mr. Driberg: Is my right hon. Friend aware that although the coroner may have taken that decision, the dead man's relatives report that when they saw his body, the face and neck were covered with bruises; and does not the fact that so long a time has elapsed before this matter came to light in itself provide additional strength for the case that there should be a full public inquiry?
Mr. Lawson: The easiest way out for me in this matter would have been a
1086
public inquiry. I told the House why there would not be a public inquiry when my hon. Friend had the Adjournment, and I made a statement as to the reasons then. I thought—-as a matter of fact, I am certain, and those who were here will agree—that the announcement concerning the nature of the court was received with perfect unanimity at the time, as I was then in a position to give a statement as to the reasons for having a military inquiry. They were, roughly, that there were irregularities discovered by the inquiry, and I wanted to get at these irregularities, as I myself suspected there was something else behind the business, and I wanted the facts. Frankly, too, it may be that out of this there may arise a court-martial, and I did not want the court-martial or the case of the men who may possibly be tried as a result of it prejudiced. As a matter of fact, I understand that my hon. Friend who communicated this case to me does not wish the name of the person concerned to be mentioned, and there is nothing to stop this case from being dealt with at this particular court of inquiry if necessary.
Major Wyatt: In view of the fact that King's Regulation 773D lays down that in a case of death the court cannot express an opinion but may only state the facts, does not my right hon. Friend think it rather detracts from the value of holding a purely military court of inquiry? Newspapers always keep names out of their reports if they are asked to do so.
Mr. Lawson: When this inquiry reports, if I think the facts are such that a further public inquiry is necessary, there is nothing to stop it. I can assure my hon. and gallant Friend that I will not exclude it, but I do want to get at the facts of this particular case in the interests of justice and, it may be, of those concerned in this matter.
Captain Blackburn: Would my right hon. Friend explain why it would be likely to prejudice the court-martial for this inquiry to be held in public rather than in private?
Mr. Lawson: I thought a certain amount of publicity might have that effect, and I want these men to have a fair chance if a court-martial be the result of the inquiry. I wanted these irregularities properly probed by military men.
Mr. McAllister: If the Secretary of State insists in making the inquiry purely military, will he give consideration to the appointment to the inquiry of some members of the excellent War Office psychiatry department?
Mr. Lawson: Yes, Sir, I have put a psychiatrist upon this inquiry and the House will probably remember also that I arranged, although it was very difficult, to have a barrister upon the inquiry in addition to the military men proper.
Mr. S. Silverman: Will my right hon. Friend bear in mind that there is considerable public anxiety arising out of this and similar cases, that the only point in having an inquiry at all is in order to allay public anxiety, and that therefore any inquiry which is held in secret must stultify itself?
Mr. Lawson: Yes, I did bear that in mind, and, for myself, if I had wanted to seek the easiest way out I would have had a public inquiry. Where there is need for such at any time, I certainly will have one. In this instance, as a result of the facts brought out by the inquiry, I thought that in order to get to the roots of the facts the best thing was to have a military and a secret inquiry. I can assure those Members who were not present that the House received that suggestion with great approval.
Mr. Pritt: Does the right hon. Gentleman realise that every important criminal trial in this country takes place after a previous public inquiry before the magistrates, and that no one would suggest that prejudices a fair trial? If that is so, why should a court-martial be prejudiced in this case? Further, does the right hon. Gentleman realise that in this country and in every other country, one gets the facts better by having a public inquiry rather than an inquiry behind closed doors?
Mr. Lawson:I respect the hon. and learned Gentleman's opinion in these matters, but I do not think there is any analogy in the point that he is making.
Mr. Driberg: In view of my right hon. Friend's reply, Mr. Speaker, I desire to ask your permission to move the Adjournment of the House on a definite matter of
1088
urgent public importance, namely, the desirability, in view of the considerable public anxiety concerning conditions at Stakehill Detention Barracks, that the forthcoming inquiry into these conditions should be held in public and should not be exclusively military in character.
Mr. Speaker: The hon. Gentleman has asked my permission to move the Adjournment of the House on a definite matter of urgent public importance. I must decline to give that permission, because I cannot see that an event which occurred 15 months ago can be regarded as of very definite and urgent importance now. It is reason that I must decline to give permission.
Mr. Driberg: On a point of Order. With great respect to you, Sir, may I point out that what makes it urgent is the fact that this court is about to open? It will open next Tuesday, and it will then be too late to alter the composition of the court.
Mr. Speaker: The Secretary of State is responsible for setting up the court. His conduct can always be challenged by this House, but, subject to that it must be left to the Minister to act as he thinks fit, and it is not for the House to tell him how to act.
Mr. S. Silverman: Further to the point of Order. Is it not the case that any actions on the lines that you, Sir, have recommended, would take place after the event, and that what is proposed by those who are interested in this case is that this inquiry, which is to open next Tuesday, shall be public and not secret; and is not that a matter of public importance? Is not that definite and is not that urgent?
Mr. Speaker: That is not my view, otherwise I should have ruled differently. We will now proceed to the Orders of the Day.

MESSAGE FROM THE LORDS
That they have agreed to—
Amendments to, —
Gloucester Corporation Bill [Lords] and Reigate Corporation Bill [Lords], without Amendment.

STATUTORY RULES AND ORDERS, ETC.
Fifth Report from the Select Committee, brought up, and read, as follows:
Your Committee have considered the Local Government (Boundary Commission) Regulations, 1945, a copy of which was presented on 16th November, and are of the opinion that there are no reasons for drawing the special attention of the House to them, on any of the grounds set out in the Order of Reference to the Committee.
To lie upon the Table.

PRIVILEGES
Report from the Committee of Privileges, with Minutes of Evidence and an Appendix, brought up, and read; to lie upon the Table, and to be printed.[No. 31.]
ORDERS OF THE DAY

  FINANCE BILL
  Considered in Committee.
  [Major MILNER in the Chair]
  3.30 p.m.
  Sir Waldron Smithers: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
  I take this action as the strongest protest I can make against the action of the Chancellor of the Exchequer in his evasion, and his unwillingness to give the information required for an appropriate discussion, on the Committee stage of the Finance Bill. Since September, 1944, on three occasions I have raised the question of increasing expenditure in connection with the service of the war. I propose to read the terms of the Question which I have put, and the only reason I know for not answering it, is the argument that it is not in the public interest. I contend that my Question was in the public interest, though it may not have been in the interest of the Government. After repeated demands to have these figures I put down a Question to the Chancellor of the Exchequer in these terms:
  "if he will give in tabular form the cost of the social services or the services in connection with the progress of the war at the latest available date and an estimate of the cost of the new social insurance proposals—the pensions for this war, the long-term and short-term housing policy, health, education and analogous services."—[OFFICIAL REPORT, Wednesday, 21st November, 1945; Vol. 416,c. 547.]
  The Chairman (Major Milner): I cannot accept the hon. Member's Motion. As I understand his complaint, he wants some particulars of expenditure actual or estimated. This, of course, is a matter that might be raised on the Budget Resolution, or on the Report stage, or on the Second Reading of the Finance Bill. In my view, the Committee is now met to discuss Clauses which relate not to expenditure but to taxation and revenue, and, therefore, I am quite unable to accept the Motion or to permit the matter to be further discussed.
  Sir W. Smithers: How can we logically or seriously consider taxation, if we do not know what the expenditure already

  1091
  passed, or envisaged in the proposals of the Government is? It makes the Debate this afternoon complete nonsense.
  The Chairman: That may or may not be so, but the hon. Member has other opportunities of raising this question and cannot expect to do so now.

  FINANCE BILL

    CLAUSE I.—(Cesser of charge of purchase tax in respect of certain cooking and heating appliances and refrigerators.)
    Mr. Turton: I beg to move, in page line 24, after "lamps," insert:
    "and immediately after the entry relating to gramophone records adapted for the use of the blind respectively."
    This Amendment is linked up with an Amendment to the First Schedule—in page 53, line 14, at end add:
    "Wireless receiving sets of the domestic or portable type purchased for the use of the blind by a charity registered under Section three of the Blind Persons Act, 1920."
    On many issues there is a vigorous clash of views between Members of different parties. I ask that, on this question, I should have the support of Members sitting in all quarters of the Committee. The purpose of the Amendment is to free from Purchase Tax the wireless sets that are purchased by the British Wireless for the Blind Fund, for allocation to registered blind persons throughout the country. As I see the position today, Parliament is committed to freeing from Purchase Tax those objects that are necessities, and is retaining the tax on those articles which are luxuries. It is clear that to all those who have neither arms or legs, artificial limbs are a necessity, and as such they have not been taxed. It is fortunate if a man who has neither arms nor legs does not want an artificial limb, but it is a very different thing when you get a blind person, to whom a wireless set bears the same relation as an artificial limb to these other cases. Yet a wireless set is to some people, who are not blind, not a necessity, and can, therefore, be called a luxury. The Wireless for the Blind Fund is maintained by public subscription. There are 70,000 subscribers to that Fund, which stands now at £80,000. At present, with the Purchase Tax at 33⅓ per cent., it means that, rightly or wrongly—in my view wrongly—theState takes £26,000 out of what, has been subscribed for the
    1092
    purpose of giving blind persons wireless sets. Therefore, a large number of persons are deprived of wireless sets by the operation of this Purchase Tax. The number of wireless sets that have now been distributed free of charge to the blind is 7,000. If this Amendment is passed, as I hope it will be, and subject to demobilisation proceeding sufficiently quickly to enable the wireless sets to be made, the additional number of blind persons who will receive wireless sets will be 2,300. In other words, without the Purchase Tax there would be a circulation of 9,300.
    What is the Chancellor's attitude or argument against the Amendment? I hope, of course, that the right hon. Gentleman will accept it without argument, but he may put up the argument, that it would be wrong for Parliament, in Purchase Tax legislation, to include a class of privileged buyers. I hope he will not use that argument, because I think it is a mistake to say that blind persons should be described as privileged buyers. May I remind the right hon. Gentleman that in the Purchase Tax provisions of the 1940 Act the Government of that day specially introduced gramophone records for the use of the blind. They appreciated that it was right that blind persons should be put in a special class, for the very reason that I have advanced earlier, namely, that on the analogy that those who have lost legs or arms do require artificial limbs as necessities, so gramophone records are necessities to the blind and not luxuries. I have drafted this Amendment and the Amendment to the Schedule so that there may not be any loophole. In the Amendment to the Schedule hon. Members will notice the words:
    "purchased for the use of the blind by a charity registered under Section three of the Blind Persons Act, 1920."
    That does limit the facility to organisations for looking after blind persons but, in fact, this Fund is even more strictly limited, because all the wireless sets for the blind are purchased by the National Institute for the Blind who, in turn, hand them over to other associations registered under the 1920 Act. If there is any doubt in the minds of hon. Members that if this Amendment were accepted, other people besides blind persons would get the benefit of it, I hope that the wording of my Amendment will remove that doubt imme-

    1093
    diately. I do urge this Amendment on the Committee and on the Chancellor. We are getting near to Christmas and here is an opportunity for the Committee to give a Christmas present to 2,300 blind persons.
    Lieut.-Commander Gurney Braithwaite: I rise to support the Amendment, which I am certain will commend itself to Members of the Committee upon whatever benches they may sit. The amount of money affected by this concession, a mere £26,000, is almost exactly the same as the item which the House of Commons agreed to, in providing greater travelling facilities for hon. Members. I am sure that hon. Members who were so ready to grant this agreeable concession to themselves will be equally ready to grant a concession to those who need it far more than anybody who is not subject to the grievous disability of blindness. Sometimes Amendments which mean concessions, however small, are resisted by the Chancellor of the day or the Financial Secretary to the Treasury on the ground that to grant the request would be to upset the equilibrium of the Budget. That would hardly happen in this case. There is a gap of some £3,000,000,000 between revenue and expenditure on this occasion, and as the hon. Member for Orpington (Sir W. Smithers) pointed out at the beginning of our proceedings, we have no real expenditure figures upon which we can act. Therefore, we feel that a request for £26,000 is hardly one that will shake the financial stability of the country, but it is one which will grant a most agreeable concession to a particularly deserving class of the community. I wonder if hon. Members really appreciate what a wireless set means to a blind person? I have had the opportunity from time to time—the heartrending opportunity—of visiting blind Servicemen in hospital, and the extraordinary delight which they get in listening to a football match on the wireless, or to a cricket Test Match, really has to be seen to be believed. I am quite sure that we who are favoured with sight are quite unable to understand the position of those who are blind.
    3.45 p.m
    This marvellous invention has given blind persons an entirely new opportunity to see as it were displayed before them those sports which they loved when they possessed sight. To those not so minded
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    the wireless gives opportunities for study and for keeping in touch with events. Blind persons rely on wireless, almost throughout their waking hours, if they happen to possess a set. Their case is not like that of the householder who keeps on the wireless as a background of noise. Blind persons do really rely on a wireless set to keep in touch with events. They listen to talks on various subjects, they listen to musical programmes, and they can even derive pleasure from hearing "The Week at Westminster." There is one other aspect of this Amendment which I think should commend itself to hon. Members opposite and bring them unanimously behind my hon. Friend. This concession would be subject to the strictest possible control. There is a body which controls these matters. This is not a concession which would run riot. I cannot conceive any hon. Member voting against it, but I at least propose to vote for it if the matter goes—and I hope it will not be necessary—to a Division. It seems to me that no Government can refuse so modest and so human a suggestion as this and I am proud to have the opportunity of supporting my hon. Friend in this proposal.
    Lieut.-Colonel Sir Ian Fraser: I do not wish to stress the sympathetic appeal which has been made, because I judge that that is strongly felt, but I would like to thank my hon. Friends who have put their names to the Amendment and I suggest to the Chancellor of the Exchequer and to those hon. Members who perhaps have a feeling that in matters of taxation we should be guided as much by our heads as our hearts, one or two practical considerations. There is a strong ground of equity why we should do something particularly for blind taxpayers and blind citizens. This is not peculiarly a sentimental matter. The blind person is robbed by circumstances of the enjoyment of many things for which he pays as a taxpayer. He is not able to contract out of paying taxes for the upkeep of the Royal Parks, and there are many other things which the ordinary person cherishes and pays for but which the blind person cannot enjoy. Conversely, there are certain things which mean more to him than to ordinary persons, and the radio is one of them. It is the blind man's newspaper; it takes the place of his book, and it is his com-

    1095
    panion. Here then is a special thing which he can enjoy abundantly whilst he is deprived of many other enjoyments for which he pays the same taxes as anyone else.
    I, therefore, want to add the suggestion that it is equitable and proper to place this particular service at the disposal of blind people in the most abundant and generous way possible. I would remind the Committee that, 20 years ago, after careful thought, an Act of Parliament was passed called the Blind Persons (Wireless Telegraphy Facilities) Act, the purpose of which was to relieve every registered blind person of the obligation to pay the 10s. licence fee which everyone else pays for the splendid services of the B.B.C. Why did Parliament do that? Why was this particular group suggested for this particular consideration? It was for the reason that I have given, that a great many people in the House felt that this was something they would like to do and something which it was fair to do. I hope that the Committee will feel unanimously that this is an opportunity to give a splendid Christmas grant to blind people.
    Mr. Edward Evans: May I intervene from this side of the House to support the plea so strongly made from the other side? I have spent all my professional life as a worker among blind people. I have been a teacher of the blind, and I have worked among them ever since starting my professional career. I should prefer this appeal to be made, not so much on the ground of sentiment as on the ground of absolute utility for the blind. It has been said that a wireless set has the same relation to a blind man as an artificial leg to a limbless man and the analogy is a very good one. There is no doubt that wireless is to the blind, not only an educative and recreative factor but a social factor. It has brought them into touch with the world from which they would be cut off otherwise. It has brought them into a community of knowledge and feeling with the rest of the world. I urge very strongly that the Chancellor of the Exchequer should sympathetically consider this Amendment.
    May I say a word about the operation of the scheme? It is operated by the Wireless for the Blind Fund, which
    1096
    derives its income mainly from the Christmas appeal made through the generosity of the B.B.C. for nearly 20 years. Last year that appeal was not made, because of the great success of the appeal made by Lord Woolton, which brought in the very substantial sum of £80,000. Some of that money has not been expended, because, unfortunately, it was not possible to buy as many wireless sets as were wanted, so the estimate that the Chancellor of the Exchequer would lose £26,000 is not altogether correct. We hope to make another appeal this Christmas and I suggest that the loss, which would be nothing like £26,000, would be more than compensated by the joy of the blind people who will benefit.
    Mr. Spearman: I support this Amendment. I fully realise the objection which the Chancellor of the Exchequer would make to any general reduction in Purchase Tax because of the inflationary effect, but the extra amount that would be spent on wireless sets if this Amendment were carried would be negligible, and could not have any inflationary effect. No one, I think, would wish to deprive the blind of wireless sets on that account. I realise, too, that there is administrative difficulty for the Chancellor of the Exchequer, once we start making exceptions. Many of us have physical defects of some sort. Personally, I am sympathetic to those who have lost a leg, but I would not think of starting an appeal to the Chancellor of the Exchequer to give some concession in the matter of Income Tax to those who have to wear artificial legs, because of the extra expense to which they are put. It seems to me, however, that the physical defect of blindness can be recognised by hon. Members on all sides as a different thing altogether from any other physical defect. Therefore, I ask the Chancellor of the Exchequer not to grudge the extra labour that will undoubtedly be put on his Department and not to deny the blind this great comfort.
    Mr. Basil Nield: I support as strongly as I can the proposal of my hon. Friend the Member for Thirsk and Malton (Mr. Turton). I suggest that this proposal is really irresistible. I realise the difficulties of the Chancellor of the Exchequer in being asked to make a special concession in favour of a particular class of persons, but I suggest to

    1097
    the Committee that the class of persons concerned hero is in a very special position and should be so treated. If the general body of taxpayers were asked if they would foot this very small bill, I have no doubt about the answer.
    Vice - Admiral Taylor: I only want to put one point and that is to remind the Committee that wireless sets were provided free for the Forces in the field. There can be no doubt whatever that blind persons would be considered by most people to have just as great claims as those who served in the field.
    The Chancellor of the Exchequer (Mr. Dalton): I am naturally very sympathetic to this claim. The question is merely one of practicability and of the form in which we should do it, if we decide to do what hon. Members who have addressed the Committee desire. If I make a concession here, I shall be going against certain principles to which importance was attached by my predecessors, and it is well that the Committee should see exactly what the problem is from the administrative point of view. My immediate predecessor said in reply to a Question in December last:
    "It has always been a principle of the purchase tax that there should be no classes of consumers privileged to buy "—
    that is, no class of consumer particularly selected or chosen for the right to buy—
    "chargeable goods free of tax, and I regret it is not possible to authorise tax-free purchase of the wireless receivers provided as a result of the Christmas appeal."
    At an earlier date, the Chancellor of the Exchequer said we must maintan the principle of the tax because once the principle of giving certain privileges appeared then it would be difficult to say where to draw the line. Those were the views expressed under the Coalition Government, and they have force. The plan so far in regard to the Purchase Tax has been to settle the field of the tax, what articles are subject to tax or exempted, and if subject to tax whether the tax shall be at one rate or another. That having been accepted, particular groups of consumers were not singled out; all who buy were treated alike. If I were to make a concession here, I must not be taken as admitting that this is a principle which would be tolerable, if it were more widely extended.
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    4.0 p.m.
    I also know enough about the proceedings in this House and of the pressure which is brought to bear by interested persons in different parts of the country—groups, associations, and so on, often in respect of very deserving cases—to know that if I we're to give way I should hereafter be pressed, in many plausible cases, to give way to the principle of allowing exemption of Purchase Tax on articles for particular groups of users. None the less, I am impressed by the arguments which have been used today, and I say at once that here the sum of money involved is not large. It would become large if, one after another, plausible cases were put forward, one pressing another through the narrow gap in the hedge which will have been made this afternoon. Therefore, my disposition is not to accept the Amendment in this particular form, because there are difficulties about that. It is not drafted in such a way that it will quite fit in. But what I am prepared to do, if the hon. Member will withdraw his Amendment now, is to put down a new Clause on Report stage in which I will seek to give effect to what has been asked for by hon. Members in different parts of the Committee.
    There is, however, a technical point about it which we must seek to deal with, because no one wants this to be humbug, no one wants all sorts of people who still have their sight, to get this advantage, and I must look into the actual physical form of these devices and see whether we can draft a form of words which will ensure, so far as possible, that benefit inures to blind persons only, and that the concession is not made use of in such a way that people who have their sight can benefit by it. Subject to that consideration, if the hon. Member will withdraw his Amendment I will undertake to put down a new Clause on Report stage; but I would also ask Members in all parts of the Committee to note that this is to be treated, from my point of view, as a completely exceptional case and not regarded as a precedent in favour of certain Purchase Tax remissions to particular selected groups in the community, because if we go far in that direction we should get into an administrative shambles and that I could not agree to do.
    Colonel Oliver Stanley: I rise only to respond to the last sentence

    1099
    in the right hon. Gentleman's speech. I think all of us realise that there is great force in the administrative argument which he put forward, and that if we were to embark upon a great list of privileged users of various articles we should rapidly render the collection of the tax impossible. We all feel, I think, that the particular case before us is an exceptional one. Not only was I tremendously impressed by the arguments put forward for it, but I can think of no other case which stands on exactly the same footing. I think I can speak for all my hon. Friends when I say that we accept with gratitude the right hon. Gentleman's proposal, and that we shall listen to his final words and not regard this concession, for which we are grateful, as a precedent for pressing still further claims. The hon. Gentleman who moved the Amendment must be congratulated on having given the Chancellor of the Exchequer an opportunity of granting a concession which, I am sure, will be widely appreciated.
    Mr. Turton: May I express my own -gratitude to the Chancellor of the Exchequer for what he has said; and, in view of the undertakings he has given, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Sir Wavell Wakefield: I beg to move, in page 1, line 24, leave out "the First Schedule to this Act," and insert:
    "Part I of the First Schedule to this Act describing domestic cooking and heating appliances and immediately before the entry relating to tramcars, trolley vehicles, omnibuses and charabancs, the words contained in Part II of the said First Schedule to this Act describing London taxicabs."
    The purpose of this Amendment, which stands in the name of myself and other hon. Members, is to ask the Chancellor of the Exchequer to provide for the exemption of London taxicabs from Purchase Tax. Purchase Tax on London taxicabs was imposed by the Finance (No. 2) Act, 194o, Sections i8 to 29. The tax is one-third of the manufacturers' price for the vehicle. Taxicabs are chargeable to the tax together with private cars, but exemption is given by the Act to all other classes of vehicles, built to a specification laid down by some controlling authority, for the carriage of passengers for hire or goods for reward. Examples
    1100
    are omnibuses and passenger coaches. I put it strongly to the Chancellor of the Exchequer that the arguments which I propose to submit will in no way conflict with what he said in granting the concession which he has just given. We are asking for no exemption for any special or privileged class of people, but are asking only for a class of vehicle used for commercial purposes to be included in a class of vehicles already exempt. That is a very important point. Representations on this point have been made by the London taxicab trade to various Government Departments, so far without success. In the war years, possibly, reasons existed for that which now, I think, no longer hold good.
    The London taxicab is a very special class of vehicle. It is easily distinguished from any other vehicle on the road; I make that point for reasons which will be clear later. It is built to a particular specification laid down by the Home Office and the Commissioner of Police. In this specification there are regulations governing what are known as "Conditions of fitness. These conditions are designed to give maximum service, safety and security to the travelling public, and they are very stringent. For instance, they lay down that the vehicle must turn in a radius of 25 feet, in order to meet the crowded conditions in London streets and the narrowness of the streets in the older parts of London. They must also be built to carry a substantial amount of luggage, and must be specially strong in order to withstand any accidents in which they may be involved, in the interests of the safety of the passengers. It is a very specially designed vehicle altogether. London taxicab proprietors cannot do as many provincial taxicab proprietors do, and that is buy any secondhand vehicle on the market, any old limousine, and seek a certificate of fitness for it. In provincial towns anyone desiring to set up a hire service can buy any ordinary motor car that may be available and get it licensed.
    The London taxicab has to be specially built and, on account of these special conditions to which I have referred, it costs more than the ordinary private motor car. Further, owing to the limited numbers of taxicabs required there is a limitation on their output, and that, of course, helps to raise the cost of the vehicle. Before the war a London taxicab cost £400. War-

    1101
    time increases in the cost of labour and materials and the addition of the Purchase Tax has about doubled the cost, bringing it to some £750 or more. The London cab proprietor really cannot afford to pay so much. Because of the "Conditions of fitness" requirements the cost of the taxicab must be written off in ten years. That means that provision must be made— or it was so before the war—to write off about £1 a week. Under present conditions that sum has been increased to about £2 a week. With the increased cost of fuel, servicing and other considerations, that means that fares will have to be substantially increased unless help is afforded in some way, and it is suggested that the remission of Purchase Tax would be a satisfactory way of helping the London taxicab proprietor. London taxicab fares are really low compared with the fares charged in many other cities, and it is most important that fares should be kept at the lowest possible figures. After all, London is a great business centre, and we hope it will be a tourist centre; it is an administrative centre also; and for the convenience of the citizens of London and their visitors, it is important to have an efficient and cheap taxicab service. I have been informed that manufacturers have been told that taxicabs are required for London, and the labour and materials areavailable, but the manufacturers are in a grave difficulty owing to the uncertainty that exists as to how many orders will be forthcoming in view of the high price of these taxicabs.
    Here, I want to make a special plea for the ex-Servicemen now returning to civil life. I do not think an ex-Serviceman can have any better job than driving his own vehicle, and we want to be sure that the purchase of a London taxicab is within the means of the returned ex-Serviceman. If this Purchase Tax is retained it means that ex-Servicemen purchasing these vehicles on hire-purchase terms will have to put down a larger deposit and make larger hire-purchase payments, and I suggest that this will make it impossible for many of them to purchase their own taxicabs. I am sure that Members in all parts of the House wish to see these men become owner-drivers of taxicabs; it is the sort of individual business which is extremely suitable for ex-Servicemen. I would also
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    press upon the Chancellor the view that taxicabs are not really a luxury; indeed, the Ministry of War Transport included them as essential passenger transport during the war.
    4.15 p.m.
    For that reason I suggest that it is inequitable to place the Purchase Tax on London taxicabs. I am informed that the London taxicab trade are desirous of seeing new and improved taxicabs introduced on to the streets of London, and I am sure that every hon. Member, as well as members of the public, also desire that, and I ask the Chancellor to remit the Purchase Tax as a means of assisting towards achieving that end. In 1938, there were some 7,811 taxicabs on the London street. The number now licensed is a little over 5,000, and it may be estimated that because of servicing difficulties there are probably not more than 4,000 taxis on the streets of London, or just about half what the number used to be. This matter has been raised on previous occasions, and the right hon. Gentleman's predecessor was asked whether he would not consider remitting the Purchase Tax on taxicabs. The answer the Chancellor of the Exchequer gave at that time indicates that he did not fully understand the situation. His reply was as follows:
    "Cars plying for hire are very of ten indistinguishable from cars in private use. Accordingly I could not exempt such cars as a class nor could I contemplate special exemption from Purchase Tax of any limited class of special design, such as London taxicabs, which it might perhaps be possible to distinguish, while leaving the others subject to tax."[OFFICIAL REPORT, 12th April, 1945: Vol. 409,c. 1998.]
    I hope I have shown clearly that the London taxicab is not a car of this nature. It is subject to special and strict conditions, and I trust that I have shown that it is easily physically distinguishable from other cars because of its special design. Finally, I would like to emphasise that the police taxicab licence, would be an absolute safeguard against any attempts at evasion of tax.
    Mr. McAdam: Has the hon. Gentleman ever travelled in a Glasgow taxicab, and can he tell me the difference between a Glasgow taxi and a London taxi?
    Sir W. Wakefield: It is many years since I had the pleasure of travelling in a

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    Glasgow taxicab—or indeed in a London taxicab. I am not familiar with the conditions of licence required in Glasgow, but I do not think that alters my final point, that it is subject to a police certificate. I apologise for having kept the Committee at some length, but I did want to go into these details fully. I hope I have made a case not in conflict with the principle referred to, and that I have given substantial reasons for the sympathetic consideration of this Amendment.
    Mr. Norman Smith: I listened very sympathetically to the arguments of the hon. Member, but I was not impressed by them in the least, and I hope that my right hon. Friend will reject this Amendment. Of all the things from which one might remove Purchase Tax I can imagine nothing less deserving than the London taxicab, but I would like to comment on the generally slipshod and careless method of argument of the hon. Member. He wanted us to be sympathetic to the unfortunate taxicab drivers who, before the war, when a taxi cost £400, had to put aside £1 a week for depreciation on a ro years' basis; and who now, when a cab costs £750 or more, have to put aside £2 a week. The hon. Member's mathematics are faulty and unreliable; £400 divided by 10 is £40, but even admitting interest, that does not amount to £1 a week, while £750 divided by £1 is nearer 3os. than£2 a week. If his argument must rest on such appallingly atrocious arithmetic, it deserves to be rejected.
    Vice-Admiral Taylor: The taxicab alone among those conveyances which cater for the public is subject to this tax, while the omnibus and coach are not. In principle they all do the same thing, they convey the public along the road; but the taxicab does more than the omnibus or coach, it conveys a person from any one point to any other point, whereas the omnibus or coach is confined to a specific route. It is difficult to understand why the taxicab alone of road transport vehicles catering for the public—and they fulfil a great public service—should have to bear the Purchase Tax. Another thing which is operating against the taxicab at present is the restriction on the amount of petrol it is allowed to use. That, taken in conjunction with the extra cost of the cab, its special design, the special require-
    1104
    ments of the police, the increased charges the owner has to meet for the repairs, upkeep and replacements, makes a very strong case for inducing the Chancellor of the Exchequer to place the taxicab on the same basis as the omnibus and the coach. In order that the public should travel as comfortably and as expeditiously as possible, it is necessary that the taxicab should be brought up to date, and anything which prevents a new type of cab being introduced is retrograde. The whole of industry has to be modernised, and old machinery scrapped in favour of new plant. Why should not that also be applied to taxicabs? The public ought not to have to travel in cabs which really ought to be on the scrap-heap.
    Mr. Edelman: I should like to invite the right hon. Gentleman's sympathetic consideration of this Amendment. I do so not merely as a member of the travelling public, but also as the representative of a constituency where the bulk of the metropolitan taxicab bodies are manufactured. The time has passed when we should consider the taxi as a luxury. We are all beginning to recognise that it is a most efficient method in normal times of locomotion between one point and another. Although we tend to regard the taxi as a means of conveyance enjoyed only by one social class, in many countries of Europe and America the taxi is regarded as a means of locomotion that all classes enjoy. We were surprised and often outraged by the ease and facility with which American private soldiers were able to obtain taxis, but I think they did show that the right attitude towards taxis is to regard them simply as a means of public conveyance. Taxicabs seem to me to fall within the principle by which it has been decided to remit Purchase Tax on public conveyances, and in their case too the tax should be remitted. The hon. Member for St. Marylebone (Sir W. Wakefield) mentioned the question of employment in the taxi manufacturing industry. Here we have a very solid justification for the remission of Purchase Tax. The taxicab is designed to a specification which is applicable only in the Metropolitan area. It is not suitable for export—though new designs may hope to capture an export market—because the peculiar conditions prevailing in London exist in very few other Metropolitan areas of the world. The metropolitan specifica-

    1105
    tion is not adapted to Paris, for example, with its broad boulevards. The London taxi requires to have a lock of special design, and be of special construction, and this means that a taxicab designed to the metropolitan specification is not normally suitable for export, although we are hoping that, later, a design may be approved which will be suitable. The Home Office has stated that it would be desirable that 3,000 taxicabs should be manufactured for the Metropolitan area in substitution for, and addition to, those already existing. I feel that the hon. Member for St. Marylebone made a valid point when he said there are many ex-Servicemen—although I do not regard this as being limited to ex-Servicemen—who would like to open a taxi business and ply for hire under a metropolitan licence. All these, I feel, are arguments which should have the careful consideration of the Chancellor, and which might commend themselves for his approval.
    Colonel Erroll: In supporting this Amendment I wish to draw attention to certain supplementary considerations which would accrue from the remission of Purchase Tax on taxicabs. We shall be faced in the months to come with increased congestion in the London streets. This will be added to by the large number of people who will drive their motor cars into the city, because of the difficulty of obtaining taxicabs. Most of us have got out of the habit of driving from country towns into the metropolis. We, perforce, have had to travel by train and take buses, or queue for taxis. As petrol rationing is reduced or eliminated, so would we drive to town and have the benefit of our own cars, rather than continue to stand in queues. If, however, there were large numbers of taxis on the streets people might he weaned from the habit of driving their cars up to town and would instead travel by train. We must have the Purchase Tax remitted so that the small individual men who constitute the bulk of drivers may place their orders without delay, and get more taxis on the road.
    4.30 p.m.
    Major Freeman: I dislike this Amendment as much as I liked the last Amendment, and I want to assure the Chancellor of the Exchequer that the odium, if any, of rejecting it—as I am
    1106
    sure he is going to do—will not be entirely confined to him. If there was a special case it has been advanced with a good deal of special pleading by the hon. Member for St. Marylebone (Sir W. Wakefield), but surely, the purpose of taxation is to cut down all luxuries. I cannot accept what hon. Gentlemen—I am sorry to say on both sides of the Committee—have said to the effect that the taxicab is no longer a luxury conveyance. It certainly is, I can assure hon. Gentlemen opposite, for the majority of the people in this country. [HON. MEMBERS: "No."] If hon. Members opposite had got into closer contact with the majority of the people of this country, they might have been sitting on this side of the Committee.
    Vice-Admiral Taylor: Surely, the hon. and gallant Member Must know that, late at night, it is impossible to get any form of transport except taxicabs.
    Major Freeman: I am grateful to the hon. and gallant Gentleman for his interruption. I agree with him, and if taxicabs could be made rather more of a popular mode of conveyance, there might be some more powerful argument for removing the Purchase Tax. We were told by my hon. Friend that the American soldier adopted the right attitude towards taxicabs, and one attitude was for the American soldier to pay a great deal more for his taxi than people in this country could afford to pay. We might feel rather more sympathetic towards the case of taxi companies and taxi drivers at the moment, if they had lived up to the description given by the right hon. Gentleman the Minister of War Transport of taxicabs as being a form' of public transport during the war. Do we want to increase the taxis on the streets? [HON. MEMBERS: "Yes."] I know that hon. and right hon. Gentlemen opposite do, but 1 am not so sure. What we want to increase are omnibus and underground railway services. Before the war our streets were disfigured, our lives were endangered, and the air was filled with fumes by the excessive number of vehicles engaged in, "mechanical street-walking." Especially in view of the fact that there is a shortage of rubber and petrol and of component parts which go to make up taxis, even if, as an hon. Gentleman said, the taxi itself cannot be exported, this is, in my view, an inoppor-

    1107
    tune moment to bring forward such an Amendment as this, and I trust that the Chancellor of the Exchequer will not accept it.
    Lieut.-Commander Gurney Braithwaite: I placed my name beneath that of my hon. Friend the Member for St. Marylebone (Sir W. Wakefield) on strictly utilitarian grounds and I trust that the Committee will in no way be impressed by the extraordinary outburst of the insular view which has just been placed before us. Listening to the hon. and gallant Gentleman the Member for Watford (Major Freeman), who not so long ago, in very different and in more distinguished circumstances, announced that he was taking part in D Day for the new Britain, it is distressing to find him so soon engaged in steps, which will seek to deprive the new Britain of the necessary transport, without which no Army is capable of advance. The hon. and gallant Gentleman said—and of course he is entitled to his view—that the taxicab is a luxury vehicle. I can o think that in his new and exalted circumstances as a Member of this House, he no longer attends railway termini and watches passengers arriving —passengers of all classes of society—and the next time some aged or infirm lady from the Watford Division arrives at Euston, heavily burdened with luggage, going to stay with her son or daughter, she is going to be told by her new representative in the House of Commons, "Pile the whole lot on a bus or get into a tube, or push it along on a porter's harrow." I am sure that the good people of Watford, when they read tomorrow what he has said, will be really astonished.
    Mr. Janner: Does the hon. and gallant Gentleman know whether it is possible today, or at any time, to compel or require a taxi man to take you from Euston to Watford?
    Lieut.-Commander Braithwaite: I am obliged to the hon. Member for West Leicester (Mr. Danner). Since his departure from the Liberal Party he is still suffering from that confusion of thought brought about by an over-consumption of cocoa. Had the hon. Gentleman listened to my humble remarks he would have heard me say that I suggested a constituent of the hon. and gallant Gentleman arriving at Euston from Watford on
    1108
    her way to some other part of London, heavily burdened with luggage, and that the hon. and gallant Gentleman had suggested her taking her luggage by bus or tube. I am within the recollection of the Committee, and as the hon. Gentleman has now joined the Socialist Party it is not surprising to see him proceeding in the reverse direction.
    I am afraid that I have strayed a little out of my course. It is not so easy for those who are advanced in years to travel, even without luggage, by other forms of transport in these days. It is not so long ago since over-burdened conductors and conductresses under the London Passenger Transport Board system, brought about understandably, from their own point of view, new regulations about standing in public vehicles. There are people who find it extremely difficult, especially people in advanced years, in making their way about London without these facilities. There is a definite shortage of these vehicles, as any hon. Members knows, when the cry of "Who goes home?" resounds in Palace Yard and he endeavours to go home by that transport. I ask the Committee to take a broader view on this matter which I believe to be more relevant to my hon. Friend's Amendment. Reference has been made to tourists and to American soldiers and the facility with which they acquire taxicabs. Taxicabs are not the only amenity which the American soldier acquires with great facility.
    Major Freeman: There is no Purchase Tax on them.
    Lieut.-Commander Braithwaite: Perhaps as that is no doubt a luxury, the hon. and gallant Member would wish to move an Amendment proposing the imposition of a Purchase Tax, but it is too late. It might produce a formidable revenue. London is much more than a tourist centre. It is a business centre and in view of the appeal which has been made on more than one occasion by the right hon. Gentleman opposite and his colleagues for an export trade drive, what could be more important to an export trade drive than that those who come over here to place their orders, and to keep business appointments, should have an easy and rapid method of travel from one part of the metropolis to another?
    Mr. John Lewis: Whereas we might agree that we would like to see more

    1109
    taxicabs on the roads, and that there is a necessity for taxicabs, what argument is the hon. and gallant Gentleman putting forward to induce the Chancellor to come to the conclusion that there ought to be a remission of Purchase Tax? These people have done very well during the war and they have obtained plenty of money.
    Lieut.-Commander Braithwaite: Perhaps I might be permitted to make the speech which I have prepared. I do not intend to sit clown before I have made my argument, or I would not have been on my feet at the moment. I do not belong to the Socialist Party, who make speeches for the sake of making them. For those who visit London on business, it is important that there should be an efficient and numerous taxicab service. The capital of a country is often known by its taxicabs. Paris for a long time achieved notoriety in that respect and it is important that London should have a good service of these vehicles.
    I come to what I believe to be the main argument in favour of the Amendment and I seem to be fated from time to time to follow the hon. Member for South Nottingham (Mr. N. Smith), with whom I had a pleasant difference of opinion the other day on Second Reading. The hon. Gentleman used extremely harsh language about this matter, far harsher language than that of the hon. and gallant Member for Watford. The hon. Member was almost truculent. I cannot help feeling that he is still suffering from the exuberance of the applause ringing in his ears from the meeting he addressed at the weekend at Swindon, in which he explained that all was well in the best possible worlds under a Socialist Government. I would commend to the hon. Member for South Nottingham the speech of one of his colleagues, that of the hon. Gentleman the Member for West Coventry (Mr. Edelman). He introduced into our discussions one of the most refreshing and valuable traditions of the House of Commons by which constituency loyalty sometimes overrides party discipline. The hon. Gentleman put forward some very excellent arguments. It is left to me to try to bring into line with the hon. Member for West Coventry, both the hon. Member for South Nottingham, and the hon. and gallant Gentleman who is sitting beside him. The Government have an interest in this matter themselves. I com-
    1110
    mend to the hon. Member for South Nottingham this fact. It was the Ministry of Supply which initiated the opinion that the supply of London taxicabs should be increased. The Minister of Supply initiated discussion, and direction was issued for the production of 3,000 new taxicabs, of which 2,000 were required from the Austin Company.
    There is more than one Government Department concerned in the matter. There are the Home Office and the Ministry of War Transport, and these Departments presumably agree that old cabs should be replaced at the earliest possible moment and have obviously made all the necessary allocations of material and labour to that end. Otherwise, why the discussion? Presumably these arrangements are agreed to and are now on foot, but the manufacturers can hardly embark on the project with any enthusiasm. This is a point which will be in the mind of the hon. Member for West Coventry; they have no idea whether the cab proprietors will be in a position to purchase the new vehicles. I hope that deals with the point raised by the hon. Gentleman the Member for Bolton (Mr. J. Lewis) who intervened just now. If the cabs are to be produced, obviously, there must be some reasonable prospect of a sale being effected. That is why we believe that the Purchase Tax is a definite deterrent to the introduction of new taxicabs for London streets. In the meantime, the normal car programme of these firms has been, and will be, interrupted in order that the taxi, cab chassis can be produced. All the efforts of the Government Departments concerned, and indeed, the motor cars, will be wasted, if, at the end of it all, the vehicles do not find a market.
    4.45 p.m.
    As to the purpose of this Amendment, one could press it upon the grounds of aged and infirm people interested in the matter, but I do not think that that is the broad argument, which should be the production of tourist traffic, proper transport across London —these are the main matters for the consideration of the right hon. Gentleman the Chancellor of the Exchequer. It is not very helpful to my hon. Friend who put the Amendment fonvard to be accused of slipshod mathematics in this matter simply because he suggested that one had to write off depreciation over a 10-year period. That is a very generous figure to take. It is

    1111
    obviously desirable to have a much shorter period, say eight or nine years, and get a constant flow of vehicles of a new and up-to-date type put upon our streets. That is the difference between practical, trade considerations and the ideological obsessions which are to be found on the other side of the Committee. I hope that the right hon. Gentleman will give his serious consideration to this matter. I am sure he will do so, because no one can be more anxious that the capital of Britain and of the Empire should have rapid and convenient transport. Now that he has listened to the arguments that have been put forward, I hope that he will be prepared to make some concession.
    Mr. Dalton: I have listened with great interest to all the speeches on this Amendment. Some of them have conflicted with others, even though coming from the same part of the Committee, but all have been good in their different ways. I cannot, however, accept the Amendment. We must not get into the habit in this Committee of accepting the first Amendment that is moved, and I cannot accept this one. The words used by my predecessor have already been quoted by the mover of the Amendment. I must not be held to be without loyalty to principles laid down by my predecessor, and in this case he used these very cogent words:
    "Cars plying for hire are very often indistinguishable from cars in private use."ߞ[OFFICIAL REPORT, 12th April, 1945; Vol. 409,c. 1998.]
    That is very true.
    Vice-Admiral Taylor: It can very easily be altered.
    Mr. Dalton:Can it? Let me give an illustration to the Committee. I have a friend in the country who keeps a public-house. He also keeps a car which plies for hire, and which is, legally speaking, in exactly the same position as a taxicab. I say legally, because structurally it is much more agreeable.
    Squadron-Leader Sir Gifford Fox: It is also much cheaper. It has not to comply with the various police regulations which operate in London.
    Mr. Dalton: That may be so, but why should my friend who keeps a publichouse in the country be penalised by assisting the London taxicabs? That is, in effect,
    1112
    what is proposed in the Amendment. The London taxicab is a peculiar structure, that is required owing to the shocking congestion which is a special feature of London. On what ground can we say that we should give a special concession to the taxicab which plies in London and is of a certain structure, as against taxicabs which ply in all the great provincial cities, not to speak of the hackney carriages which go along the roads in country districts?
    Lieut.-Colonel Sir Thomas Moore: The taxicab owned and driven by the London taxi driver is his livelihood. The other is merely an auxiliary.
    Mr. Dalton: That is completely untrue, if I may say so without offence. There are a great many drivers who ply outside London and who make a living by driving the car.
    Vice-Admiral Taylor: I would put it to the Chancellor of the Exchequer that his friend does not need to comply with the police regulations in London in respect of his car, and that makes it a different matter. A London taxicab has to comply with regulations laid down by the police, but the Chancellor of the Exchequer's friend has not. Therefore, there is no analogy between the two cases.
    Mr. Dalton: I cannot agree with that argument. The fact that the taxicab in London has to be of a certain shape is because of the great congestion of the streets in London —and the more taxicabs the greater the congestion will be. That is not a ground for discouraging my hon. Friend the Member for West Coventry (Mr. Edelman), who made a very agreeable speech, although I am afraid he was totally against me because, in his constituency, they were making a lot of taxicabs. Of course, those vehicles will come in as replacements in due course for some of the older taxicabs now plying on the streets of London.
    The short point is that I am asked to discriminate in favour of a certain section of people who make their living by plying for hire. That, I should have thought —indeed I am sure —is not a justifiable proposition.
    Sir W. Wakefield: Surely, the whole point is that London taxicabs have to be built to a special specification as compared with other commercial vehicles.

    1113
    That is quite a different proposition from the proprietor who is using ordinary cars in the country or elsewhere. Because of the very fact that a special specification is required by the licensing authority, we ask that these London taxicabs shall be included with all other vehicles which have to be built to special specifications.
    Mr. Dalton: Yes, but if the hon. Gentleman were still sitting for Swindon as he used to instead of sitting for St. Marylebone, I am pretty sure that he would see the force of my argument, and if not, perhaps my friend the publican would help to convince him. Of course, the interests of the country districts have to be given special consideration by Members of the Conservative Party —or that used to be the case before the Election, when they claimed, broadly speaking, to represent the country districts. I notice that they do not say it to quite the same extent now. Although the country districts should always be in the forefront of our minds, we ought not to be too preoccupied with Metropolitan considerations, and we ought not to introduce into our legislation discriminatory relief for persons who choose to ply a certain trade in London rather than ply it in the rural districts or some provincial centre.
    This whole question is part of a larger question which we shall be considering at a later stage in this Committee, the taxation of motor cars. The position now is that these cars will pay Purchase Tax. I was asked by the motor industry to give a definite statement about the Purchase Tax and to say whether it would remain on or not. They said they wanted a definite statement. I gave them a statement to the effect that, as things were now, I could not see my way to exempting motor cars from Purchase Tax. In relation to this Amendment, I cannot see my way to exempting from Purchase Tax this very small section of motor cars plying in one particular part of the country, great as is our affection for London, and I therefore ask the Committee to reject the Amendment.
    Mr. Charles Williams: The Chancellor of the Exchequer has quite rightly rejected the Amendment, because it does seem to be small and narrow, affecting only London. I notice, however, that he is in a benevolent mood, and I have no doubt that he will wish
    1114
    me to accept his argument that this is a most excellent Amendment, only it is not wide enough. That was the whole basis of his argument. That being the case, would he not, on this occasion or on some other occasion, be prepared to widen out the Amendment so as to take in the whole of the country? Perhaps I may put this matter from a rather wider point of view. An hon. Gentleman opposite said just now that the taxicab in Glasgow was not the same as in London. I do not know whether that is so, but that is a point of view from a Scotsman, and at the moment it can be left out of the picture. I would rather consider the taxicabs in my own constituency. People come to the station and they have to be taken wherever they want to go. I would warn hon. Gentlemen opposite that our town of Torquay is rather hilly, and that it always brings people back to health, and people who go to live there live a long while. I want to give that warning, because this House is visibly reducing the vitality of hon. Gentlemen opposite.
    Surely, there is a real reason why the Purchase Tax, which was originally meant to reduce expenditure on luxuries, was put upon taxicabs. I am not appealing to the Chancellor to take the tax off ordinary cars, but if we are to encourage people to travel, and overcome the appalling congestion which exists in London at the present time, could not the right hon. Gentleman indicate that he will give favourable consideration to the removal of this tax on cars for hire wherever they are, at the earliest possible moment, and so encourage the production of such cars? As I understand this Clause and its ramifications, there are apparently other public vehicles that do not have tax put on them, so why should publicly-hired cars suffer? They go out of their way to serve the public. Only this morning on arriving at Paddington I saw a woman and two children taken into a taxicab to be driven away, after a very long railway journey, to some remote part of London. She could not possibly have got to such a place except by taxicab. Cannot the Chancellor of the Exchequer on this occasion take a wide, and not a narrow point of view, confined to London? Cannot he take the wide view, and take the Purchase Tax off all cars for hire?
    5.0 p.m.
    Sir G. Fox: I was surprised to hear the Chancellor of the Exchequer tell my hon. Friend the Member for St. Marylebone (Sir W. Wakefield) that if he still sat for Swindon he would not vote in favour of getting the Purchase Tax off London taxicabs. I myself, representing a part of Oxfordshire, shall certainly vote with my hon. Friend the Member for St. Marylebone, if this Amendment is carried to a Division. I myself hope that, if the Purchase Tax is taken off the London taxicabs, then the Chancellor, in his fairness, will extend the concession to the cars that ply for hire and taxis in my constituency so that they also may be free from the tax. These taxicabs in London are very much more expensive to build, owing to the special seating requirements, and they look very antediluvian. Americans have said, "What terrible looking taxicabs," but, when they are worn out, they are hot bought up by people going in for private hire work on the country roads. No, these people buy good private cars, at a cheap price. There is no such thing as a secondhand market for London taxicabs outside the metropolitan area. I can assure hon. Members opposite that there is a great shortage of taxicabs in London, and, as the House sits later and later, even the hon. and gallant Member for Watford (Major Freeman) may begin to wonder whether a taxicab is not a necessity or whether he ought to stay the night here, when all public transport has stopped. I ask the Chancellor whether, between now and the Report stage, he cannot apply this, not only to London taxicabs, but to all other cabs which ply for hire.
    Mr. Osbert Peake: I hope the Chancellor will, at any rate, consider what has been said in the course of the discussion today, even though he has indicated that he cannot accept the Amendment at present. We, on this side of the Committee, feel that this is a very special and very strong case. I thought that both the Chancellor and the hon. Member for South Nottingham (Mr. N. Smith) rather misunderstood the basis on which this case is put. It is not put, as was the last Amendment, on the footing that a certain class of persons have a special claim to our sympathy. That was not the claim at all. The Chancellor said he was asked to discriminate in
    1116
    favour of a particular section of the people, but the Purchase Tax is upon the article, and it is not because we have any sympathy with taxicab drivers that this Amendment is put forward. I know of no section of the community who enjoy less public sympathy than the taxicab drivers of the present time; in fact, all the drivers whom I personally have hailed in the last three years, appear to be well qualified for the free wireless sets provided by the preceding Amendment.
    This claim is put forward as a matter of equity and justice. It is put forward upon the basis that a taxicab is part and parcel of our public transport system, and it is the principle of the Purchase Tax not to impose a charge upon what is part and parcel of our public transport system. The hon. and gallant Member for Watford (Major Freeman) put forward the hopelessly out-of-date view that a taxicab is, to some extent, a luxury article. I served with the present Leader of the House at the Home Office for something like 41 years when this question continually cropped up, and the right hon. Gentleman the Leader of the House most emphatically stated in the House that he no longer regarded the taxicab as a luxury article, but as a purely utility vehicle, especially under war conditions, when people had to move their homes and very often travel with large quantities of luggage. In those circumstances it was a very essential part of our transport system.
    The taxicabs, like the drivers, are getting older. In 1942 some inquiries I had to make showed that no fewer than seven taxi drivers were over 81 years of age. How old the vehicles are I do not know, but many of them are, undoubtedly, completely out of date, and no doubt that is the reason why the Home Secretary, in conjunction with the Ministry of Supply, has plans for providing, as speedily as possible, some 3,000 new taxicabs. We say that, in those circumstances, it is quite unreasonable to impose Purchase Tax on these vehicles. They are a specialised type of vehicle, and they are unique in three respects. They posses a very high degree of safety, a very high degree of manoeuvrability, and an absolutely exceptional degree of discomfort. If hon. Members look at the third column of the Schedule to the Finance Act of 1940, which deals with the Purchase Tax upon

    1117
    these vehicles, they will find that excepted he might begin with this particular from any Purchase Tax at all arc tram- cars, trolley vehicles, omnibuses and and charabancs. It is far more comfortable to travel in a charabanc than in a taxicab. They are, indeed, the luxury liners of the road, and everybody who has travelled in either of these two classes Of vehicle knows which they would prefer from the point of view of luxury and comfort. I say, therefore, that as these vehicles are heard of anybody buying a London taxi-an essential part of our public transport system, they have a claim, in justice and equity, to be freed from the tax.
    The Chancellor says that, if he does this for the London taxicab, which, as I say is a wholly unique vehicle, he would have to do it for all the other public transport motor cars —the ordinary motor car, of, whatever it may be, the 12 h.p. the Morris or Austin, which is used as a taxi in the countryside. I hope that, at some stage, he will proceed to take that course, but we suggest to him that, for a start,
    he might begin with this particular vehicle, which is of exceptional design, and has no value for any other purpose than plying in the public service. That is the difference between these vehicles and ordinary motor cars, which are used as taxis in the countryside. These other vehicles can be sold, and have a market as private motor cars; the London taxis, on the other hand, cannot. I have never heard of anybody buying a London taxi-cab, and running about in it, either on pleasure or even on business jaunts. I say that this is a quite exceptional and very strong case, and the remission of the tax would cost the Chancellor a paltry sum of money, and 1 therefore advise my hon. Friends to go into the Lobby on this Amendment.
    Question put, "That the words proto be left out stand part of the Clause."
    The Committee divided: Ayes, 283; Noes, 150.

    Division No. 28.]

    AYES.

    [5.10 p.m.

    Adams, Capt. H. R. (Balham)

    Champion, A. J.

    Gaitskell, H. T. N.

    Adams, W. T. (Hammersmith, South)

    Chater, D.

    Gallacher, W.

    Alexander, Rt. Hon. A. V.

    Chetwynd, Capt. G. R.

    Gibbins, J.

    Allen, A. C. (Bosworth)

    Clilherow, R.

    Gilzean, A.

    Alien, Scholefield (Crewe)

    Cluse, W. S.

    Glanville, J. E. (Consett)

    Allighan, Garry

    Cobb, F. A.

    Gooch, E. G.

    Alpass, J. H.

    Cocks, F. S.

    Goodrich, H. E.

    Anderson, A. (Motherwell)

    Coldrick, W.

    Greenwood, Rt. Hon. A.

    Anderson, F. (Whitehaven)

    Collindridge, F.

    Grenfell, D. R.

    Astor, Hon. M

    Colman, Miss G. M.

    Grey, C. F.

    Attewell, H. C.

    Cook, T. F.

    Grierson, E.

    Awbery, S. S.

    Cooper, Wing Comdr. G.

    Griffiths, D. (Rother Valley)

    Ayles, W. H.

    Corbet, Mrs. F. K. (Camberwell, N.W.)

    Gunter, Capt. R. J.

    Ayrton Gould, Mrs. B.

    Corlett, Dr. J.

    Guy, W. H.

    Bacon, Miss A.

    Crossman, R. H. S.

    Haire, Fit.-Lieut. J. (Wycombe)

    Baird, Capt. J.

    Daggar, G.

    Hall, W. G. (Coins Valley)

    Barnes, Rt. Hon. A. J.

    Daines, P.

    Hamilton, Lt.-Col. R.

    Barstow, P. G.

    Dalton, Rt. Hon. H.

    Hannan, W. (Maryhill)

    Barton, C.

    Davies, Edward (Burslem)

    Hardy, E. A.

    Battley, J. R.

    Davies, Clement (Montgomery)

    Hastings, Dr. Somerville

    Bechervaise, A. E.

    Davies, Ernest (Enfield)

    Haworth, J.

    Belcher, J. W.

    Davies, Harold (Leek)

    Henderson, J. (Ardwick)

    Benson, G.

    Davies, Haydn (St. Pancras, S.W.)

    Hewitson, Captain M.

    Berry, H.

    Davies, S. O. (Merthyr)

    Hicks, G.

    Beswick, Fit. Lieut. F.

    Deer, G.

    Hobson, C. R.

    Bevan, Rt. Hon. A. (Ebbw Vale)

    Diamond, J.

    Holman, P.

    Binns, J.

    Dobbie, W.

    House, G.

    Blackburn, Capt. A. R.

    Dodds, N. N.

    Hoy, J.

    Blenkinsop, Capt. A.

    Driberg, T. E. N.

    Hudson, J. H. (Ealing, W.)

    Blyton, W. R.

    Dumpleton, C. W.

    Hughes, Hector (Aberdeen, N.)

    Bottomley, A. G.

    Durbin, E. F. M.

    Hynd, H. (Hackney, C.)

    Bowden, Fig.-Offr. H. W.

    Dye, S.

    Isaacs, Rt. Hon. G. A.

    Bowles, F. G. (Nuneaton)

    Ede, Rt. Hon. J. C.

    Janner, B.

    Braddock, Mrs. E. M. (L'p'l, Exch'ge)

    Edwards, A. (Middlesbrough, E.)

    Jeger, Dr. S. W. (St. Pancras, S.E.)

    Braddock, T. (Mitcham)

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

    John, W.

    Brook, D. (Halifax)

    Edwards, John (Blackburn)

    Jones, J. H. (Bolton)

    Brooks, T. J. (Rothwell)

    Edwards, N. (Caerphilly)

    Jones, Maj. P. Asterley (Hitchin)

    Brown, George (Belper)

    Evans, E. (Lowestoft)

    Keenan, W.

    Brown, T. J. (Ince)

    Evans, S. N. (Wednesbury)

    Kendall, W. D.

    Buchanan, G.

    Ewart, R.

    Kenyon, C

    Burden, T. W.

    Fairhurst, F.

    King, E. M.

    Burke, W. A.

    Farthing, W. J.

    Kirby, B. V.

    Butler, H. W. (Hackney, S.)

    Forman, J. C.

    Kirkwood, D.

    Byers, Lt.-Col. F.

    Foster, W. (Wigan)

    Lang, G.

    Callaghan, James.

    Fraser, T. (Hamilton)

    Lavers, S.

    Carson, E.

    Freeman, Maj. J. (Watford)

    Lawson, Rt. Hon. J. J.

    Castle, Mrs. B. A.

    Freeman, P. (Newport)

    Lee, F. (Hulme)

    Lee, Miss J. (Cannock)

    Parkin, Flt.-Lieut. B. T.

    Stokes, R. R.

    Levy, B. W.

    Paton, Mrs. F. (Rushcliffe)

    Strachey, J.

    Lewis, A. W. J. (Upton)

    Palon, J. (Norwich)

    Stross, Dr. B.

    Lewis, J. (Bolton)

    Peart, Capt. T. F.

    Stubbs, A. E.

    Lewis, T. (Southampton)

    Perrins, W.

    Summerskill, Dr. Edith

    Logan, D. G.

    Platts-Mills, J. F. F.

    Symonds, Maj. A. L.

    Longden, F.

    Poole, Major C. C. (Lichlield)

    Taylor, H. B. (Mansfield)

    Lyne, A. W.

    Porter, E. (Warrington)

    Taylor, R. J. (Morpeth)

    McAdam, W.

    Porter, G. (Leeds)

    Taylor, Dr. S. (Barnet)

    McAllister, G.

    Pritt, D. N.

    Thomas, I. O. (Wrekin)

    Mack, J. D.

    Proctor, W. T.

    Thomas, John R. (Dover)

    McKinlsy, A. S.

    Pryde, D. J.

    Thomas, George (Cardiff)

    Maclean, N. (Govan)

    Pursey, Cmdr. H.

    Thomson, Rt. Hon. G. R. (E'b.g'h, E.)

    McLeavy, F.

    Ranger, J.

    Thorneycroft, H.

    MacMillan, M. K.

    Rankin, J.

    Tiffany, S.

    Macpherson, T. (Romford)

    Rees-Williams, Lt.-Col. D. R.

    Tolley, L.

    Mainwaring, W. H.

    Reeves, J.

    Turner-Samuels, M.

    Mallalieu, J. P. W.

    Reid, T. (Swindon)

    Usborne, Henry

    Mann, Mrs. J.

    Rhodes, H.

    Vernon, Maj. W. F.

    Manning, C. (Camberwell, N.)

    Richards, R.

    Viant, S. P.

    Mayhew, Maj. C. P.

    Ridealgh, Mrs. M.

    Wadsworth, G.

    Medland, H. M.

    Robens, A.

    Walkden, E.

    Messer, F.

    Roberts, G. O. (Caernarvonshire)

    Walker, G. H.

    Middleston, Mrs. L.

    Robertson, J. J. (Berwick)

    Wallace, G. D. (Chislehurst)

    Mitchison, Maj. G. R.

    Rogers, G. H. R.

    Wallace, H. W. (Walthamstow, E.)

    Monslow, W.

    Royle, C.

    Watson, W. M.

    Montague, F.

    Scott-Elliot, W.

    Webb, M. (Bradford, C.)

    Moody, A. S.

    Segal, Sq. Ldr, S.

    Weitzman, D.

    Morley, R.

    Sharp, Lt.-Col. G. M.

    Wells, P. L. (Faversham)

    Morris, P. (Swansea, W.)

    Shurmer, P.

    Wells, Maj. W. T. (Walsall)

    Morrison, Rt. Hon. H. (Lewisham, E.)

    Silverman, S. S. (Nelson)

    While, H. (Derbyshire, N.E.)

    Mort, D. L.

    Simmons, C. J.

    Whiteley, Rt. Hon. W.

    Moyle, A.

    Skeffington, A. M.

    Whittaker, J. E.

    Murray, J. D.

    Skinnard, F. W.

    Wigg, G. E. C.

    Naily, W.

    Smith, Capt. C. (Colchester)

    Wilkes, Maj. L.

    Naylor, T. E.

    Smith, Ellis (Stoke)

    Wilkins, W. A.

    Neal, H. (Claycross)

    Smith, Norman (Nottingham, S.)

    Willey, O. G. (Cleveland)

    Nichol, Mrs. M. E. (Bradford, N.)

    Smith, S. H. (Hull, S.W.)

    Williams, D. J. (Neath)

    Nichols, H. R. (Stratford)

    Smith, T. (Normanton)

    Williams Rt. Hon. E. J. (Ogmore)

    Noel-Baker, Capt. F. E. (Brentford)

    Snow, Capt. J. W.

    Williams, J. L. (Kelvingrove)

    Noel-Buxton, Lady

    Solley, L. J.

    Willis, E.

    O'Brien, T.

    Sorensen, R. W.

    Wills, Mrs. E. A.

    Oldfield, W. H.

    Soskice, Maj. Sir F.

    Wise, Major F. J.

    Orbach, M.

    Sparks, J. A.

    Wyatt, Maj. W.

    Paget, R. T.

    Stanford, W.

    Yates, V. F.

    Paling, Will T. (Dewsbury)

    Steele, T.

    Zilliacus, K.

    Palmer, A. M. F.

    Stephen, C.

    Parker, J.

    Stewart, Capt. M. (Fulham)

    TELLERS FOR THE AYES

    Mr. Mathers and Mr. Pearson.

    NOES.

    Aitken, Hon. M.

    Dodds-Parker, Col. A. D.

    Jarvis, Sir J.

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

    Donner, Sqn.-Ldr. P. W.

    Jeffreys, General Sir G.

    Amory, Lt.-Col. D. H.

    Dower, Lt.-Col. A. V. G. (Penrith)

    Jennings, R.

    Asshelon, Rt. Hon. R.

    Dower E. L. G. (Caithness)

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

    Baldwin, A. E.

    Drayson, Capt. G. B.

    Keeling, E. H.

    Beamish, Maj. T. V. H.

    Drewe, C.

    Kerr, Sir J. Graham

    Beattie, F. (Cathcart)

    Duthie, W. S.

    Kingsmill, Lt.-Col. W. H.

    Bennett, Sir P.

    Eden, Rt. Hon. A.

    Lambert, G.

    Birch, Lt.-Col. Nigel

    Erroll, Col. F. J.

    Lancaster, Col. C. G.

    Boles, Lt.-Col. D. C. (Wells)

    Fletcher, W. (Bury)

    Law, Rt. Hon. R. K.

    Boothby, R.

    Fox, Sqn.-Ldr. Sir G.

    Legge-Bourke, Maj. E. A. H.

    Bower, N.

    Fraser, Maj. H. C. P. (Stone)

    Lindsay, Lt.-Col. M. (Solihull)

    Boyd-Carpenter, Maj. J. A.

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

    Lloyd, Maj. Guy (Renfrew, E.)

    Braithwaite, Lt. Comdr. J. G.

    Galbraith, Cmdr. T. D.

    Lucas-Tooth, Sir H.

    Bracken, Rt. Hon. Brendan

    Gates, Maj. E. E.

    Lyttelton, Rt. Hon. O.

    Bromley-Davenport, Lt.-Col. W.

    George, Maj. Rt. Hn. G. Lloyd (P'br'ke)

    MacAndrew, Col. Sir C.

    Buchan-Hepburn, P. G. T.

    Glossop, C. W. H.

    McCallum, Maj. D.

    Bullock, Capt. M.

    Gomme-Duncan, Col. A. G.

    Mackeson, Lt.-Col. H. R.

    Butcher, H. W.

    Gridley, Sir A.

    McKie, J. H. (Galloway)

    Butler, Rt. Hon. R. A.

    Hannon, Sir P. (Moseley)

    Maclean, Brig. F. H. R. (Lancaster)

    Challen, Fit.-Lieut. C.

    Hare, Lt.-Col. Hon. J. H. (Woodbridge)

    MacLeod, Capt. J.

    Channon, H.

    Harvey, Air-Comdre. A. V.

    Macpherson, Maj. N. (Dumfries)

    Churchill, Rt. Hon. W. S.

    Haughton, Maj. S. C.

    Maitland, Comdr. J. W.

    Conant, Maj. R. J. E.

    Headlam, Lt.-Col. Rt. Hon. Sir C.

    Manningham-Buller, R. E.

    Cooper-Key, Maj. E. M.

    Hinchingbrooke, Viscount

    Marshall, Comdr. D. (Bodmin)

    Corbett, Lieut. Col. U. (Ludlow)

    Hollis, Sqn.-Ldr. M. C.

    Marshall, S. H. (Sutton)

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

    Holmes, Sir J. Stanley

    Maude, J. C.

    Crosthwaite-Eyre, Col. O. E.

    Hope, Lt.-Col. Lord J.

    Medlicott, Brig. F.

    Crowder, Capt. J. F. E.

    Howard, Hon. A.

    Mellor, Sir J.

    Cuthbert, W. N.

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

    Molson, A. H. E.

    Darling, Sir W. Y.

    Hurd, A.

    Moore, Lt.-Col. Sir T.

    Davidson, Viscountess

    Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)

    Morrison, Maj. J. G. (Salisbury)

    Digby, Maj. S. Wingfield

    Hutchison, Lt.-Col. J. R. (G'gow, C.)

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

    1120

    1121

    Neven-Spence, Major Sir B.

    Sanderson, Sir F.

    Thorneycroft, G. E. P.

    Nicholson, G.

    Savory, Prof. D. L.

    Thornton-Kemsley, Col. C. N.

    Noble, Comdr. A. H. P.

    Scott, Lord W.

    Thorpe, Lt.-Col. R. A. F.

    Nutting, Anthony

    Shephard, S. (Newark)

    Touche, G. C.

    Peake, Rt. Hon. O.

    Smiles, Lt.-Col. Sir W.

    Turton, R. H.

    Peto, Brig. C. H. M.

    Smith, E. P. (Ashford)

    Wakefield, Sir W. W.

    Pickthorn, K.

    Snadden, W. M.

    Walker-Smith, Lt.-Col. D.

    Pitman, I. J.

    Spearman, A. C. M.

    Wheatley, Lt.-Col. M. J.

    Ponsonby, Col. C. E.

    Spence, Maj. H. R.

    White, Sir D. (Fareham)

    Poolu, Col. O. B. S. (Oswestry)

    Stanley, Col. Rt. Hon. O.

    White, Maj. J. B. (Canterbury)

    Prescott, Capt. W. R. S.

    Stoddart-Scott, Lt.-Col. M.

    Williams, C. (Torquay)

    Price-White, Lt.-Col. D.

    Stuart, Rt. Hon. J.

    Williams, Lt.-Cdr. G. W. (T'nbr'ge)

    Prior-Palmer, Brig. O.

    Studholme, H. G.

    Willink, Rt. Hon. H. U.

    Ramsay, Maj. S.

    Sutcliffe, H.

    Winterton, Rt. Hon. Earl

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

    Taylor, C. S. (Eastbourne)

    Young, Maj. Sir A. S. L. (Partick)

    Roberts, Maj. P. G. (Ecclesall)

    Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

    Robinson, Wing-Comdr. J. R.

    Teeling, Flt.-Lieut. W.

    TELLERS FOR THE NOES:

    Ross, Sir R.

    Thomas, J. P. L. (Hereford)

    Major Mott-Radclyffe and

    Commander Agnew.

    Question put, and agreed to.

    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    5.19 p.m.
    Colonel Oliver Stanley: I do not know, Mr. Beaumont, whether it is convenient for you to say now, but you will notice there is a block of Amendments on pages 200 and 201 of the Order Paper, which raise questions similar to those we have been discussing. Owing to the form in which this Clause is drafted, these Amendments have been put down to the Schedule. If any of those Amendments were not to be called by you, the only opportunity for discussing them would be on the question "That the Clause stand part of the Bill." Therefore, it might be convenient for you to give a Ruling now.
    Mr. Charles Williams: I wonder, Mr. Deputy-Chairman, if I might ask the Chancellor of the Exchequer whether, during the Division interval, he has been able to think out an answer to the question I put to him a few minutes ago. I see the right hon. Gentleman is smiling. I hope he will be able to announce that my ideas are first-class and that he will give way at once. Is that the intention?
    The Deputy-Chairman (Mr. Hubert Beaumont): Perhaps I should inform the Committee that on the First Schedule we are not taking the first three Amendments because they are covered by the Debate which preceded the Division. We are proposing to take the remaining Amendments on Part II of the Schedule.
    Mr. C. Williams: Might I ask the right hon. Gentleman if he would give an answer to the question which I put seriously just now, on behalf of a large section of the community; and if he cannot consider the matter now, will he at any rate look at it favourably because of the
    1122
    very great arguments put forward on their behalf?
    Mr. Dalton: I will go on looking at everything which is still in Debate on which any Member or any section of the Committee feels strongly. But I have no hope that I can accept the suggestion made, for the simple reason that one cannot determine to what use a particular car is to be put—except perhaps the London taxi, with which we have just dealt. Whether a car will be used for purely private use or for plying for hire we cannot tell, so the whole proposal is impracticable in that form.
    Clause ordered to stand part of the Bill.

    CLAUSE 2. —(Amendment as to grading of certain of the rates of excise duty on mechanically propelled hackney and goods vehicles, etc.)
    Motion made, and Question proposed, "That the Clause, stand part of the Bill."
    Mr. C. Williams: I would like some further explanation of Subsection (4). Under this Subsection the rates of duties chargeable within the area of a local authority by the authority or by any person acting in pursuance of a contract with that authority in order to cleanse or water roads or gullies shall be those specified in Part III of the Second Schedule. Before we pass from this Clause, as we shall not have another opportunity of going into this, I wonder why, when we have such a vast extension of works in different places, apparently, as I read it, anything which is necessary' for watering roads is not equally to the public advantage. Surely that would be equally to the public advantage, and the vehicles for this purpose should be let off the tax as well.

    1123
    I put forward that proposal because I thought it might be helpful. Also, I would like an explanation of what is meant, from a purely technical point of view, by the word "gullies" in this Subsection.
    The Minister of War Transport (Mr. Barnes): Subsection (4) deals with the vehicles of local authorities, as the hon. Member said, for cleansing and other public purposes. The tax schedule in 1933 placed these vehicles on a favourable rate basis. That is being maintained, but now these vehicles are being regraded like other vehicles of that particular type and will appear conveniently in the same taxation schedule. The hon. Member will recollect that the Chancellor, in his Budget speech, in dealing with the whole of this problem of regrading vehicles, undertook to modify the Schedule to enable them to be graded on a single-seat and ¼-ton basis to meet the requirements of the trade generally. Subsection (4) applies to the vehicles of local authorities in particular. I regret that I am not able to give him the technical explanation for which he asks, but the principle I have indicated covers this Subsection.
    Mr. C. Williams: May I thank the right hon. Gentleman for the extraordinarily kind and courteous answer which he has given me? It will enable me to explain these difficult and technical matters to my constituents. May I also say that I regret he is unable to explain the word "gullies," especially with a Law Officer sitting next to him, but then I fully recognise that they are passing a lot of legislation about which they do not know very much.
    Clause ordered to stand part of the Bill.

    CLAUSE 3.—(Charge of excise duty on certain mechanically propelled vehi cles by reference to cylinder capacity in lieu of horse-power.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Alfred Edwards:When we were discussing the matter on the Second Reading, the Chancellor promised that he would keep an open mind. He and previous Chancellors have said that. I would remind him of that fact however and ask him whether he
    1124
    would not consider the Amendment which I have put down to leave out this Clause. During the previous Debate I also tried to convince the right hon. Gentleman that we could get almost unanimous support for a fuel tax instead of this cubic capacity tax. These are the right hon. Gentleman's words on that occasion:
    "I will not commit myself on the matter tonight. I would only say that it will be a miracle if my hon. Friend has got all the manufacturers to say the same thing. I never could get them to do that. All I can say is that if my hon. Friend puts down an Amendment, I will give it careful onsideration."—[OFFICIAL REPORT 19th NOVEMBER, 1945, Vol. 416 c. 154.]
    The only Amendment I could put down was one to leave out the Clause. That has not been called, so I have to speak on this Motion. I want to put it to the Chancellor now, that he is doing much more in this particular Clause, if it goes through, than he meant. He is hamstringing the motor industry for practically all time. He thinks that we shall not perform this miracle. I believe he is wrong. Those of us who have had opportunity of discussing this matter with the trade and all the interested parties, have, I think, convinced them that they, by their neglect, are doing a very serious thing. I am told by some of the leading manufacturers that the only reason why America ever got ahead of us in the motor industry was that we were tied up with this foolish tax legislation, whereas they were not. There never has been anything to be said in its favour, and I cannot understand how anybody ever brought themselves to pass it. It must be wrong to compel engineers to design engines on fiscal considerations that are not engineering principles. That can never be right. Yet this great industry of ours has been tied up all these years. Now there is to be a change. I sympathise with the Chancellor, for if the trade had treated me as it has treated him by leaving it till the eleventh hour, I should have been very annoyed. But he must remember that there is a lot to be said for those people who do come at the eleventh hour. This Committee must not turn down a thing that is good in itself, and which is going to help a great industry, just because the trade itself has not been of one mind up to the eleventh hour.
    5.30 p.m.
    The vast majority will accept the fuel tax in place of this cubic capacity tax

    1125
    if the Chancellor of the Exchequer says that he will accept it. I know that he has had correspondence on this and representations. It has been said that the cubic capacity tax is a great advance on the old R.A.C. rating. Of course it is—a very great advance. But no one has ever said that it is a better tax than the fuel tax, and people who have said that they like this cubic capacity tax because it will enable them to get on with a very powerful export drive, have said it, because they were under the impression that the Chancellor of the Exchequer had said, for all time, that he would not accept a fuel tax. That is the only reason. I can say that there is nobody in this country, no interest—and we have interviewed them all—that is against a fuel tax. Most of them are against the cubic capacity tax if the Chancellor of the Exchequer will say that he is still open to consider the fuel tax.
    The proposal made by the last Chancellor of the Exchequer was that if the trade could show him that he could get the same revenue, by some other means, he did not care how they got it. Why should he? He is not an engineer. "It is our business," he said, "to get a certain amount of revenue; consider it among yourselves; and I will accept it, if it produces the same amount of revenue." The time has come when nobody in this industry is against the fuel tax. I do not think that there is anybody who has spoken against it. I want to read one or two things that have been said in favour of the fuel tax. The Society of Motor Manufacturers and Traders informed the Chancellor of the Exchequer in a letter dated 18th September that the manufacturers are not greatly concerned whether the cubic capacity basis or the fuel basis is adopted. That is true. I have a letter from the same organisation saying that they will support a fuel tax. In conversations which took place last week with the manufacturers, we were informed that if there was unanimity among the users—and I speak for the R.A.C. and the Combined Board at this time and it is their statement that I am putting forward—of all types of motor vehicle in favour of the tax being on petrol, the manufacturers would be prepared to support it.
    The traders—the Motor Agents Association—in a letter to the Chancellor of the Exchequer dated 31st September said:
    1126
    "The Association strongly advocate the adoption of a fuel tax."
    Users of private cars and motor cycles, the Standing joint Committee, the Royal Automobile Club, the Automobile Association and the Royal Scottish Automobile Club, speaking jointly, have advocated the substitution of an annual registration of £5 on all vehicles, with the addition of 3d. on the present duty of 9d. per gallon on petrol. I am quite sure that the Chancellor of the Exchequer had not realised there was an annual registration of £5 proposed and he thought that he was going to fall short of the amount required to be provided. Anything that I say to him today fails, if we do not provide the same revenue. A £5 registration tax—£1 for motor cycles—and a 3d. increase on the petrol tax will give him almost the amount of money he requires. The goods vehicle representatives were a body of people who spoke against it at one time. The National Road Transport Federation, representing all classes of goods vehicles, have now recommended to constituent bodies the adoption of the fuel tax. No final decision has been taken by the Federation and not all of the constituent bodies have yet made their decisions, and will not do so until the 4th December next. The Public Transport Association has referred to its members the question of a fuel tax. A decision will be taken by this body on13th December next. The Scottish Motor Transport Company have indicated that they are prepared to accept these proposals. I have talked to them upstairs. The Municipal Transport Association has agreed to send representatives to the Standing Joint Committee and the R.A.C. and R.A.S.C. are all meeting on the 6th December next to discuss this matter. The three bodies representing the goods and passenger carrying interests have indicated to me that they would welcome the postponement of a decision on this important matter, so that these discussions may be carried through, and any doubtful points cleared up.
    I think I have shown, therefore, that there are various strong bodies of opinion among the users and manufacturers who have thought again on this matter. Those who were opposed to it on one occasion have now thought over it again, and wish to appeal to the Chancellor of the Exchequer to adopt this fuel tax in the place of the tax he has in this Bill. I am only

    1127
    asking the Chancellor of the Exchequer not to make up his mind against it, now that these people have same measure of unanimity. It will be a dangerous thing if he does. It is determining the character of our motor industry and putting us firmly behind our leading competitors. All I am asking him to do is not to make this his last word. This matter is of great importance to this industry. If the right hon. Gentleman deleted this Clause he would have before his next Budget the benefit of the old revenue and he would lose nothing, and if he comes forward on the appointed day with this new form of legislation he will get all the revenue he requires. I appeal to the Chancellor of the Exchequer to give us some encouragement; to say that he will agree to delete this Clause, and give us a month or two to think it over with him, and see whether we cannot give him the measure of unanimity for which he has asked. Please do not think that miracles cannot happen. I believe that, on this occasion, a miracle will happen.
    Sir G. Fox: I rise to support the Chancellor of the Exchequer and to express the hope that he will retain this Clause. My Division has the Nuffield organisation composed of Morris, Wolseley, M.G. and Riley. Before the war 25 per cent. of all cars built in this country were built by this organisation. They built 100,000 out of 400,000 cars. They, with others, have been pressing for the review of the R.A.C. formula. They wanted it changed for greater technical freedom, and they advocated that the taxation should be in small steps of 100 c.c. Other manufacturers have advocated that it should be in wider steps—200 C.C. or 400 C.C. It is very interesting to note that the manufacturers who have advocated the wider steps are such as Vauxhall, which was bought up by General Motors of America, and Ford's, which came to build a factory at Dagenham in Essex. They found that the graduated h.p. rating forced them to come to this country to build the cars in which they specialised. The small steps of h.p. taxation before the war enabled the motor car industry in this country to thrive.
    Now, with greater technical development, the manufacturers who benefited under the h.p. tax require a change and they want it to be done in gradual steps
    1128
    of taxation, namely, 100 c.c. If it was done otherwise, it would be difficult to determine, without hardship on some manufacturers, whose products and machine tools set-up fall nearer the bottom of a wide taxation gap. Equally, once the arbitrary wide steps were adopted, it would lead to constant change, and there would be constant approaches to the Treasury for these to be changed. Forward notice for such change would have to be given, as engine design and fuel improvements warrant a reduction in size. The Chancellor of the Exchequer would find it very embarrassing. The question of wide steps is also bound up with the date of introduction of the cubic capacity tax. If the wide steps—200 to 400 c.c. — were adopted, it means that the manufacturers would want the date of introduction for three or four years ahead because several of their existing models would want completely redesigning. If the steps could be of a 100c.c. there would be a period for making the necessary adjustment—
    Major Cecil Poole: Will the hon. Member inform the House whose information this is?
    Sir G. Fox: I am speaking on behalf of the Nuffield organisation and other organisations.
    Mr. A. Edwards: Is the hon. Gentleman telling the House on behalf of the Nuffield organisation that he is against the fuel tax?
    Sir G. Fox: No, I will come to the question of the fuel tax. I have been in this House for a number of years, and I have heard many Members advocating how fair the fuel tax is and why it should be substituted for the h.p. tax; and the Chancellor of the Exchequer has listened to these arguments put up by the A.A. and the R.A.C., and he thought them so excellent that he also increased the petrol tax without any corresponding reduction in the h.p. tax. I can assure the hon. Member for East Middlesbrough (Mr. A. Edwards) that the Chancellor of the Exchequer never takes a plunge in the dark. He generally makes sure that he is well balanced and on the right side. If, as suggested, you should have a registration tax of £5 or £6 up to 1,300 c.c. and then a petrol tax—and the Chancellor of the Exchequer will be quite sure that he is not going to lose—it may well be that

    1129
    the artisan class who have the eight h.p. or ten h.p. cars today will find that they will have to pay more tax than they would under the £I per 100 c.c. arrangement.
    It is easy and popular to say "Put a tax on petrol." I would like that myself, but it is a dangerous thing to put up too good an argument in favour of a tax. It often happens that it may be increased by the Chancellor and then there is no answer to it. There are other suggestions. It is said that having a graduation of 100 c.c. will mean great multiplicity in designs. I am sure that is far from the case. The great difficulty in production is labour and the general conditions in factories, and the tendency of all manufacturers is to reduce the different number of models to the minimum. I wonder why those who are in favour of the wider steps advocate the 14 h.p. car, which is what 1,500 c.c. roughly means. If we think that by producing a 14 h.p. car in this country we are going to expand our exports greatly, all I can say is that in Melbourne the pre-war price of a 14 h.p. Morris was equal to that of an American eight-cylinder 32 h.p. Buick. The Morris 140-h.p. had so reduced overhead costs that they were not included, and there was virtual elimination of profit margins. A great number of the cars exported from this country are the small 8-h.p. cars. In the Morris range, in 1937–38, the 8-h.p. cars represented 71 per cent. of all Morris exports. I hope that I have satisfied the Chancellor that there is a great desire in a large section of the motor industry to know where they are, that they are satisfied with this agreement per 100 c.c., and that they would like the tax per 100 c.c. to be reduced.
    5.45 p.m.
    Mr. John Lewis: I would stress the point that the hon. and gallant Member for Henley (Sir G. Fox) did not speak against the fuel tax. I venture on this speech with a certain amount of trepidation, because I know that the Chancellor has had more trouble over this question of motor taxation than over any other Clause in the Bill. He has had representations made to him even at dinner-time, and perhaps at breakfast-time, and I hope he will forgive us, if we drew his attention once again to this most important matter, in view of the fact that
    1130
    upon his decision now depends what form our motor car industry is to take for Many years to come. I agree that it is not his sole responsibility; indeed, this matter should have been settled by his predecessors. I have the greatest sympathy for him in this matter, but I hope he will give the most careful, unbiased consideration to the arguments put forward on this matter from both sides of the Committee, because I do not believe that this is a party matter. Hon. Gentlemen opposite often claim that matters are not party matters which are party matters, but this is one of the cases in which we must agree that the subject is purely technical. In these circumstances, I hope that my right hon. Friend will thrust out of his consciousness any ideas that he might have had before he came here this afternoon, and consider this matter in a new light.
    We all agree about the export trade. We know full well that not only in respect of motor cars, but in respect of all goods we produce in this country, it is vitally necessary, in the interests of our national economy, that we should export to the utmost. There is a lot of nonsense talked about a sellers' market. We have no sellers' market unless we are prepared to produce those types of goods which will be readily acceptable in the buyers' market. So far as the motor car industry is concerned, we are not producing the type of vehicle which will find a ready market abroad in competition with those vehicles supplied by American concerns. The only way in which we can find that sellers' market is to produce high-power cars to challenge American superiority in this field, cars which are suitable for conditions of travel which exist all over the world, and not for those particular conditions which exist in this country.
    So far as the revenue is concerned, I think that my hon. Friend the Member for East Middlesbrough (Mr. A. Edwards) has made it quite clear that it is merely a question of reducing the amount taken in respect of the licensing or taxation part of the revenue, and increasing the amount of the fuel tax. We find that in 1938 the Chancellor received £36 million from the annual licence duties on vehicles of all kinds. In respect of fuel Custom duties he received £54 million. We, are asking him to adjust those figures so that he obtains the same revenue of £90

    1131
    million, but in such a way as to give an opportunity to motor manufacturers to standardise, which is of importance if we are to settle what kind of vehicles are to be made for the export market. There has been a lot of divergence of opinion among motor car manufacturers and other interested bodies as to the nature of this taxation. The Chancellor claims to have been guided to a large extent by the predominance of a particular point of view on this matter, but I would remind him that he has not always allowed himself to be guided by information he receives from outside interests. I cannot remember that before he raised the Surtax he called in a body of Surtax payers and consulted them on what he should do. In this matter I believe it is the duty of the Government, if people cannot make up their minds, to make up their minds for them, an idea which probably will be unpopular on the other side of the Committee.
    The Chancellor has said that behind all his plans for taxation, was full employment for all industries, including the motor car industry, and he stated quite specifically that he would consider a tax change in the event of any particular tax arrangement impeding full employment. On 19th November when this matter was debated in the House during the Debate on the Finance Bill, the Chancellor said he wanted the export of motor cars to be raised to above 50 per cent. of production. In those circumstances he must obviously have had in his mind that if the export output is to be raised to 50 per cent. the remaining per cent. of the vehicles will be absorbed in the home market. We must welcome his promise that, in the event of full employment being affected by the inability of the home market to absorb that 50 per cent., he will consider the reduction of the Purchase Tax to enable that quantity to be absorbed. We know that he cannot reduce the "Purchase Tax now; he has his bills to meet.
    The question we have to decide is how to produce a car suitable for the export trade, at the same time supplying the domestic market to ensure that we have full employment in the motor car industry. I believe the Chancellor will agree that full employment is vital from the point of view that we cannot produce economically for export purposes unless we have full
    1132
    employment and, equally because of the multiplied effect of that on the national economy. The only way we can have full employment is to ensure standardisation of type and to build vehicles suitable for the world market. Only in that way can we eliminate the multiplicity of car sizes which make our production costs unduly high and uncompetitive. The change from a h.p. to c.c. tax really leaves the main part of the problem untouched. If we are to get these foreign markets we must build a larger car, because a larger car is a better car. I could not agree with the suggestions by the hon. and gallant Member for Hornsey (Captain Gammans) on the previous occasion when this matter was debated in the House that we have subordinated sound engineering to an arbitrary factor like taxation. We are producing a sound engineering job in the motor car industry today, but by virtue of the fact that there are these restrictive influences on the size and capacity of these vehicles it might well be compared to producing a three-valve wireless set, which is a splendid set, but which has not the efficiency in all respects of an eight-valve super-het, because the questions of space and volume do not have to be taken into account in designing the larger wireless set. It is precisely the same in the matter of vehicle construction.
    A few weeks ago, when I was in New York, I saw in Broadway a small British made car—I will not mention any names —shining like an advertisement for a tin of boot polish. Around it were standing a large crowd of Americans. I crossed to listen to their comments. I will not repeat them, because they were not too complimentary. They did not believe it was possible for anybody to travel "in that little thing," as they put it. Indeed, if we are to consider this question of export service we must get down to some standard, and if we are to do that we must remove the restrictive influences of the present form of taxation.
    Take certain industries which are interrelated to the motor car industry. I refer in particular to the tyre industry in this country. We cannot have motor cars without tyres, and it is conversely true that tyres are no use without motor cars. Before the war we were exporting approximately 33 per cent. of our output of tyres. In America today one

    1133
    size of tyre is suitable for approximately 75 per cent. of the vehicles produced, whereas in this country is requires 100 different sizes to satisfy the need of all sizes and makes of cars. Assume for the moment that we sell our cars abroad. Under our present system involving multiplicity of design when a now tyre is wanted it is very likely that the size required will riot be available, whereas in regard to American vehicles purchasers know that every tyre store has that size in stock, because they arc more or less standard. It is of vital importance to take this tyre industry into account, because if we standardise on tyres we can produce them much more economically than at present. It costs much less to produce a large quantity of one size than to change the moulds to produce smaller quantities of various sizes.
    More or less every point mentioned in the Debate has been with the object of inducing the Chancellor to change his mind. I have very little hope that anything I can say will make him do that now. To be fair to him I will say that even though he were to remove the restrictive influence of the present system of taxation that would not be enough, for the simple reason that there is no guarantee that when he has done that the British motor car manufacturer will produce that type of vehicle which we claim is necessary for the export market.
    I would like to see a working party set up for the motor car industry in the same way that the President of the Board of Trade found it necessary to set up working parties for other industries, including the cotton industry. He told the cotton industry that we require continuous runs to reduce the cost of production, and this is vitally true in the case of the motor industry as well. Whereas the Chancellor might have had difficulty in getting the motor car manufacturers to make up their mind as to what they do want, if there was a working party the motor industry would soon make up their mind, as to what they did not want. It would result in efficiency, and we should get cars suitable both for the export market and domestic purposes. My right hon. Friend has said that he listens to these matters with a half-open ear. He has said on other occasions that his mind is wide open. The Financial Secretary has said that his mind is only half open. I appreciate that this is a very difficult prob-
    1134
    lem, and I would stress again that if the motor car manufacturers cannot make up their mind then let the Chancellor make up their minds for them. What we are concerned with is our national economy and the future of the motor car industry. I submit to him that we must not allow the viewpoint of individual manufacturers to interfere with sound and sane judgment on this issue, because transport motor cars, and the export trade, are all matters of vital importance at the present time.
    6.0 p.m.
    Sir Peter Bennett: I rise because of some of the remarks made by the hon. Member for Bolton (Mr. J. Lewis). I do not understand his suggestion that there is a sort of conspiracy on the part of British manufacturers to make something which they ought not to make and which is antisocial. The reason that the British motor manufacturers make small motor cars is because the public ask for them in very large numbers. Something like 90 per cent. of the output of British motor cars are from 12 horse power downwards, and that is because the British motoring public want small cars, which are inexpensive. The reason they do not want large motor cars is because it is part of Government policy to tax motor cars very heavily. The consequences are that motoring is expensive. A large number of people in this country want inexpensive motoring, and as long as we have high taxation we shall have a demand for inexpensive cars which will be small cars. That is a reason, which the hon. Member for Bolton may note, why a large number of cars in this country are small cars.
    Mr. John Lewis: My remarks were about the large number of cars made for export purposes.
    Sir P. Bennett: I was coming to that. Any export business is based, in the main, onthe home market and the British motor industry, like other industries, has its export trade based on the home market. In the past, it was something like 15 to 20 per cent. The overheads were charged in such a way that the cars were sold overseas at a less rate of overhead than those at home. The Americans make 4,000,000 cars to our 400,000 and their home car is suitable for the overseas market. The result is that they are able

    1135
    to send overseas a different type of car because their home trade is in that car. They make them in very large quantities; their surplus is equal to our production and it is impossible for us to manufacture a small quantity of cars of a different type from those intended for export. There is no mystery about it; the motor car manufacturer is not doing this out of "cussedness." If it was a business proposition he would take it up willingly. We all know markets where the goods are suitable for overseas. The reason the motor car manufacturer does not make a few small cars and send them overseas to compete with American production, is because it has been an uneconomic procedure in the past.
    Turning to the petrol tax, the position of the motor car manufacturer is simple. He is like the Chancellor and has never been able to get all his customers to agree. There has always been this difference of opinion on whether petrol should be taxed, or whether the taxation should be by registration. There has always been the dffierence, because there are those who use the cars for limited purposes and say, "Let us have it on the petrol only," and those who say, "We do not want it -on the petrol, because when we do a big mileage we shall be penalised." They have never told the manufacturers that they were in agreement, and because of that difference, the motor car manufacturer went to the Chancellor and said, "We do not want this R.A.C. tax; we want it on cubic capacity, and in small steps." We are now told that there is agreement. The motor car manufacturers have said that if there is agreement between their customers it is not for them to stand in the way, but so long as there is not agreement they say, "We do not like the R.A.C. rating, and we want it on cubic capacity. If there is agreement and the agreement is reported to the Chancellor and we hear about it we shall, of course, fall in with that agreement." It is for the other interests to say that they will come in.
    Mr. Walker: I support this Amendment because I am thoroughly convinced that the present system prevents the natural development and progress of the motor industry and also prohibits large numbers of people from owning their own cars. I look upon the
    1136
    motor car industry as providing not for one section of the community, but for all sections, a real pleasure in life, a pleasure in which I think everyone ought to have the opportunity to indulge.
    I am going to follow a different line of argument altogether from that which has been put forward so far on the Amendment. I urge upon the Chancellor that working men should have just as much opportunity and the same facilities for running cars as anybody else. During some wage negotiations in the newspaper industry many years ago the late Lord Northcliffe was taken to task by one of his fellow employers because he paid such high wages to his linotype operators that some of them were even able to come to work in their own motor cars—using that, of course, as an argument that high wages should not be paid because it gave the men the opportunity of purchasing cars for their own use. But the late Lord Northcliffe said, "I am very glad to hear that my workers can afford motor cars." So I think everybody in every section of the Committee today will uphold the view that if we can raise—and we hope to raise in the future—the wages of the workers, they ought to have the opportunity given them for as much cheap motoring pleasure as they can possibly obtain. I bought my first motor car in 1923. How I did it I do not know. A good many people questioned how I happened to get hold of a motor car—in fact some very hard-hearted people even went so far as to say that probably I had stolen it. But I can assure the House I paid good English cash for it. It cost £250 and, after I had used it seven years, I had to sell it for £10 and if I had tonight all the money which I have spent in motor cars and motoring, I could regard myself as a bloated capitalist.
    Motoring is a real pleasure, not only to the wealthy classes but to the working classes. As soon as the basic petrol allowance was removed, I noticed particularly how people flocked to take motor rides in what was described by an hon. Member opposite as "the luxurious motor charabanc." I think that is an indication that the workers of this country love motoring and are prepared to make a good many sacrifices in order to have that pleasure. In Autumn and in Summer at weekends one could see, especially in prewar days, not hundreds but thousands of people coming from Lancashire, York-

    1137
    shire and the Midlands to enjoy a Sunday out in the beautiful Lake District. There they would squat every few miles on the road having al fresco meals and enjoying the beauties of their surroundings. I urge on the Chancellor that he should give some consideration to the worker who wants to run a motor car. Sometimes as I sit behind him here and he is standing at the Despatch Box, I feel I am looking at six feet of solid democracy. He believes, like everyone of us on this side of the House, in equality of rights. The working man does not want to be fobbed off, in his desire for motoring, with the second-hand cast-off of his wealthy contemporary. He wants to have a decent car underneath him, a car in which he can sit with comfort. I try to imagine the right hon. Gentleman trying to shove himself into a baby Austin and I think of the kind of danger he would be on the roads. The first policeman who saw him coming would be justified in stopping him and charging him with driving to the danger of the public, and if I were on the Bench, I would fine him £10 for taking the risk.
    The paint I want to put forward, and I hope the Chancellor will take particular notice—he and I are old friends—is that the working man who owns a car is only able to run it at the weekends. He is not on the road every hour of the day, arid every clay of the week. He is confined to a certain circumscribed time. Yet, when it comes to paying the tax, he has to pay exactly the same as the man who is on the road every hour of the day, every day of the week and every week of the year. The tax in that respect is a most undemocratic tax. I know the Chancellor wants to be sure of his revenue. Surely the best way to ensure that lie gets, not only the present revenue, but increased revenue, is to alter the incidence of tax on the motor car. I want him to take hold of this idea we are putting forward today and develop the motor industry, so that revenue will not be coming in as it is today from a certain circle of people, but from a wider area altogether because of the conditions inviting far more 'people to indulge in this luxurious pleasure of motoring. If he will do that, then the development will provide him not only with his present revenue, but with a greater revenue.
    There are two great sources of revenue that the Chancellor looks to with a good
    1138
    deal of expectation—the revenue he derives from drink and the revenue he derives from tobacco. They are splendid sources of revenue. If he treated the drink and tobacco in the same way as he treats the motoring public, and said to the drinker and tobacco smoker, "You must pay a substantial registration fee before you drink your first glass of beer, or smoke your first pipe of tobacco," what would become of a great portion of his revenue? When I bought my first motor car, I found that before I dare take it on the road and turn the wheels round, I had to pay about £20 down for taxation and insurance. This kind of taxation is the biggest prohibition that can stand in the way of ordinary people using' motor cars. For the sake of the motor car industry, and for the sake of allowing numbers of worthy people to enjoy some of the pleasures of life, I urge upon the right hon. Gentleman to consider this matter from the point of view I have indicated. To a vast number of people, motoring is not a business and not a commercial concern. It is a pleasure, something that gets them out into the country, fills their lungs with fresh air and makes them feel that life is worth living. Do not make it hard for them. Make it as easy as you can, and I assure the right hon. Gentleman that the revenue will be all right in the end.
    6.15 p.m.
    Mr. Boothby: I was rather astonished by the observation of the hon. Gentleman who has just sat down, for I never thought that a motor car filled my lungs with good fresh air. It fills my lungs with petrol fumes. I certainly hope the Chancellor of the Exchequer will pay no attention to the veiled suggestions that he should impose a registration tax upon smokers and drinkers, before they have their first drink or smoke of the day, because that would create a more alarming situation than ever. I suggest to the Committee that we should come back to a consideration of the real issue before us this evening, which is: Are we going to manufacture motor cars in the immediate future primarily for export or not? As I read it, the President of the Board of Trade attaches great importance to the motor car industry from the export point of view. That, I think, was behind the savage clash which took place at what must have been a very unpleasant meeting between

    1139
    him and the motor car manufacturers the other day, when they ended up by abusing each other flat out. My sympathies on that occasion, I must say, were on the side of the motor car manufacturers and not on the side of the President of the Board of Trade. He seemed to me to be complaining quite unreasonably, because, as hon. Members on both sides of the Committee have pointed out in this rather interesting Debate, the present state of our motor car industry is the result of the taxation imposed on that industry, not only for the last five years, but for the last 25 years.
    I have always taken the view that that taxation was absolutely wrong and should have been changed many years ago. It produced a wholly artificial type of motor car designed, as one hon. Member opposite said, to keep down expenses at all and any cost, and to reduce the consumption of petrol to the absolute minimum. But it was an artificial type of car. From the point of view of utility, it was not the most efficient. It may have put £10,000,000 into the pockets of Lord Nuffield, but it did not put 10,000,000 cars into the export market before the war, because the export market had no use for them and will have no use for them in the future. We may as well make up our minds to it. If hon. Members have seen the new models of the Rover and the Humber that have just come out, they will agree that if the President of the Board of Trade thinks he is going to put them on the markets of the world, except in a period of artificial scarcity, he is doomed to bitter disillusionment. The fact of the matter is that the taxation which is now proposed, even in these proposals by the Chancellor of the Exchequer, is knocking out the motor car industry of this country. I would beg my right hon. Friend to read an extremely interesting article in the Socialist newspaper called "The New Statesman and Nation" this week, from which I will give two very short quotations. It says:
    "The State does not say, Gentlemen, in this export campaign Austins will be the parent firm for the 16 horse power national model, Standard for the 12, Morris for the 10, Vauxhall for the 8. The rest of the firms will become daughters to these parents. In 1945 total production will reach 100,000 units, in 1946, 500,000 units. Everything will be purchased by the State, which will market the product through a single public corporation. No, on the contrary, the
    1140
    Government says, 'Gentlemen, the war is over, and since we are not nationalising the motor industry, State control is over as far as you are concerned. Go back to private enterprise and conquer the foreign market. To assist you in this we shall modify the horse power tax for your requirements, but the new tax must raise as much money as the old. In addition to this, we shall maintain the Purchase Tax in order to kill deliberately the home market for the time being.' That is the Government's contribution. The rest is up to you."
    That, according to our leading, most enlightened and most intellectual Socialist journal, is what the Chancellor is doing to the motor car industry, and I think it is true. I would say to the right hon. Gentleman—and I am sure we shall all have occasion to say it very often in the months and years that lie ahead—that a combination of private enterprise and punitive taxation will never work. If you are going to hand over 80 per cent. of the export trade of the country to private enterprise, you must create the conditions in which private enterprise can function, and that is where the right hon. Gentleman and this Government will ultimately fall down, to the great detriment not only of the right hon. Gentleman's own party, but of the whole country as well.
    We have no car suitable for export at the present time. What we want, of course, is a medium power tough car, capable of pretty high speed and standing up to very rough use. That is the kind of car which will find a place in the export markets of the world. The little tiddler that runs about the road and goes 25 miles to the gallon, has not a hope. If the Chancellor of the Exchequer continues with his present rate of taxation, we shall have to rely upon something else than the motor car industry if we are to recapture our export trade. We are up against a car the price of which will be fixed by a colossal and virtually untaxed home market—the market of the United States of America. Think of the advantage which that gives to the motor car manufacturers in the United States. Go to Detroit, as I have been, and see the production and the background of it; their export is only six per cent.
    In conclusion, I do not believe that in the motor car industry or in any other industry, you can build up a really big export trade except upon the basis of your own home market. I do not think it is ever possible unless we can manufacture a car—I should say at least 50 per cent.

    1141
    of the total production—which will find a real demand in this country from people of moderate means. Until we can manufacture that car, we shall never capture on any scale that is desirable or necessary the export markets which we want, so far as this industry is concerned. Therefore, in my submission, the Chancellor of the Exchequer is entirely wrong in imposing taxation which, in the words of the "New Statesman," kills the home market. That is what he is doing, and so long as he continues to do it we shall never recapture the export trade.
    Mr. Perrins: I rise to support the hon. Gentleman who has suggested that the Chancellor should review motor car taxation. I certainly believe that the present form of taxation controls the design of private cars and industrial vehicles. I wonder if the Chancellor has ever been to see the industrial vehicles weighed for taxation purposes. If so, he will know that people empty their radiators and petrol tanks, take off the spare tyres and even the tail boards in order to keep their vehicle down below a certain weight for taxation purposes. I listened with very great respect to the view put forward by the hon. Member for Edgbaston (Sir P. Bennett), who said that the motor car industry produced a motor car in accordance with public demand. I know he is an authority on this subject, and I always listen to his views with respect. If I go to a showroom to buy a motor car, I do not buy the car that I need but that which I can afford. At the moment I run a 12 horsepower dependable car, made in my own city, but in January I am faced with possibly a £15 insurance and a £15 taxation, and if I am buying a car I am faced with the purchase price of the car, plus £30. So I hesitated, and said, "Oh, dear no," and I got an Austin 7. I know the limits and uses of the seven horsepower car, but nobody can convince me that an Austin 7 represents a family car, especially for a man of my stature. Under the present system we know that it represents the cheapest car we can afford.
    Now let us look at it the other way. Let us suppose, for the purpose of argument, that we shall have a flat car tax of £5. My initial expenditure at the beginning of the year would be substantially reduced, and when I wanted to go to the seaside it would only be a question of 2s.
    1142
    or 4s. there and back, and for the convenience that I get in running a larger car I think it is worth while. I hope the Chancellor will pay due heed to my hon. Friend who said that many users of the roads, including the large industrial users, now agree that this would be the best form of taxation. I think that is important. All road users are agreed that this is the best form of taxation. I think that if we had a petrol tax we should find that the motor car designer would be able to design a car in the light of that figure; many of these very small models would disappear, and they would produce a car which would give better service in the home market. When we talk about export, we should only export that which is surplus to what we produce in the home market. I cannot agree with the argument that the wide multiplicity of designs in this country is necessary.
    6.30 p.m.
    When we were fighting the war and building planes we did not allow people to say "We will have this model here and this model there, and this little one here and this little one there." We limited the number and so did a fine job of work. I want the Chancellor to use his imagination daringly. I do not think we ought to allow a halt between two opinions in the motor industry to influence us at present or to hold up the motor industry itself. I want to support the appeal of the hon. Gentleman the Member for East Middlesbrough (Mr. A. Edwards) to the Chancellor to hold his hand. At least let us inquire into this matter and, having inquired, let us determine policy, because I feel that now we have a change in rating we are going to design cars for the next 25 years, and if we miss an opportunity now I am afraid it is one that will not occur for another 25 years. Therefore I feel that this plea, which is for reasonableness, is one to which the Chancellor should pay due heed. We ought to have a clear study of the problem sufficient to make up our minds in April, and it is for that reason that I hope the Chancellor will accept the point made by the hon. Member for Middlesbrough.
    Lieut. - Commander Joynson - Hicks: The Committe have addressed to the Chancellor an appeal for the revision of this tax, on practically every conceivable ground. They have appealed to him from the point of view of

    1143
    export, of the industry as a whole, of pleasure users and of industrial users, and the Chancellor may perhaps feel he has come to the point where there can be no other basis on which an appeal can be addressed to him. I have however another point to put to him, otherwise I would not now be taking part in the Debate. There is one very important argument which has not been addressed to the Chancellor. That is the argument from the point of view of agriculture. I put it to him that it will be of the greatest assistance to agriculture, if he will take into consideration the pleas for the revision of the tax. I think he will agree, that from the Government's point of view, the wellbeing and success of agriculture, and food production in general, are of the utmost importance to the country as a whole. It will assist farmers very greatly indeed if they can feel that they can utilise a high-powered car instead of a low-powered car in the course of their business.
    I doubt very much if many industrial Members of the Committee realise the multiplicity of uses to which farmers put their cars. It is not only for pleasure purposes; it is not only for taking the farmer himself and his men and very often the products of his farm to market; it is not only for general transport convenience, but also for many and varied forms of work on the farms as well that cars are used. It is of tremendous importance to him to have a big and powerful car, which he can turn into use on the farm. Therefore I do ask the Chancellor very briefly to take this also into account among the other considerations which have been addressed to him from all parts of the Committee. I ask him to appreciate that if he can assist farmers by putting them on the same basis, so that they can get a high powered car instead of being forced through taxation, to the necessity of getting a low-powered one, it will be very convenient to them, also very beneficial to the industry and to the food production which is so vital at the present time.
    Mr. Crossman: I would like to add one word to the almost unanimous appeal to the Chancellor at least to defer his decision on this matter for four months. It is only a question of deferring for four months.
    1144
    I think that many Members on both sides of the Committee have come to the same conclusion, that during these four months there may be formed a consolidated view between the Government and the industry, between employers arid employees, which will enable that industry to play its part in the export market in the immediate future, as we know is needed, and later to provide the home market with decent cars for both rich and poor.
    I would like to stress one or two other points which I feel he should consider in making up his mind this evening. I do not think that it is quite fair to say that we have changed our mind about cubic capacity. The discussions on this point took place before the Government's export plans were known. They took place in an atmosphere in which the manufacturers were chiefly concerned with the home market. And when the relative needs of the two kinds of taxation were discussed it had a certain effect on some of the manufacturers, that in a sense the c.c. tax was a tariff tax and had the merit that it could be used for keeping out American cars. To an industry that is concerned with the home market as number one thing and with an export market only as something which you subsidise, for national prestige, but in which you do not hope to make your money, the cubic capacity tax is something to which serious consideration must be given. In my view the statement which the Government made recently on motor exports has completely changed the fiscal situation, because of the high priority that the Government gave to the export of cars. If it is really true that motor exports are priority No. I then surely it is absolutely obvious that any tax which is in effect a tax on horse power—whether it is horse power or c.c. —militates against the export of cars from this country. It is equally clear that, if we are to export, the majority of cars built in this country must be either medium or high-power cars; and any form of taxation which forces the making of small cars as against the medium and high-power cars and which forces the ordinary person to buy a small car when he really wants a medium one, equally militates against our exports. We cannot hope to compete with the V.8 which is being sold for £220, unless the form of taxation—whether horse-power or c.c.—

    1145
    gives the manufacturer a chance of making a car which will compete with it instead of being compelled to make a small horse-power car. It is that consideration first and foremost which I would like to put before the Chancellor in asking him to postpone making up his mind.
    There is a second one of equal importance. The hon. Member for Rossendale (Mr. Walker) was perfectly right when in his speech he put up the argument that if a man is forced to buy a pipe, of highly unhygienic design owing to fiscal pressure, and is then made to pay registration for the use of the pipe and thirdly to insure himself against the risk of smoking the pipe, and the total that he would be paying every 1st January would be between £7 and £8 a year, then the Chancellor would not get as much money from the smoker as he is getting today. If you discourage people from taking up a vicious or a healthy habit, you will not get as much money out of the habit. The habit of motoring has been discouraged in this country from the point of view of the ordinary person because of the enormous initial outlay in which he was involved in buying his car and paying the tax and so on. It is humbly suggested that if you do away with every form of tax on the car itself except £5 a car for all models then the ordinary man in the street will be inclined to buy a medium or high-powered car and this would be the sort of car which we would need to export.
    Why is this relief of taxation being asked for at the present moment? The Government have stated that there are not going to be any cars for the home market for the next one to two years. But the Chancellor must look beyond those two years—as the industry must—in his planning, to see what production will look like and to plan for the home market on which the industry is to recoup its losses for those two years. It must have a chance of building the same type of car, the medium car, which it is trying to sell abroad. In my humble belief it is only a fuel tax, as against either the c.c. or the horse-power tax that will accomplish that. It is as the hon. Member for Rossendale said, the only democratic tax, and it is the only economic tax which will enable the Government to carry out their export policy.
    1146
    The question of steps has been put up for the Chancellor to decide. My only opinion is this. I think that any method that is used in determining the number of models fiscally is a thoroughly bad method. Have we not yet learned our lesson that the fiscal influence on car designs has been one of the worst tragedies of this country. To those who would argue that the Government in this way have a right to influence the manufacturers of cars in the production of models, I would say that there are many and very much better ways for the Government to tell the manufacturers what to do. There are other ways of going to the industry. We went direct to the industry during the war; and we only had a few models. It is possible that this example can be copied now. I was rather gratified to observe the hon. Member for East Aberdeen (Mr. Boothby) has been completing his education by reading "The New Statesman and Nation" although it made it difficult for me to make my speech afterwards. If I could add to his admirable quotations from that paper, in point of fact it was argued there that the best way of approaching this problem of getting the models down to a reasonable number so that the manufacturer would be enabled to compete with the American market was direct Government control of design. It is for all these reasons that the Government should go again to the industry and say that it wishes them to revive the conditions under which they worked during the war. Then we had a few models, and, indeed, we rationalised the industry, although I suppose that that is not a subject for debate this afternoon but is a subject rather for a working party.
    What I wish to do is to appeal to the Chancellor to consider in the next four months—and it is something which we must make up our minds about—the vital need there is for some form of consultation between the Government and the industry not merely in dealing with this fiscal subject but on the whole question of how best to produce motor cars both for export and in the long run for the British public. It is a very bad thing for the Government and the industry to jibe at each other as has been done recently. Our industry is one of the most important in this country, employing more skilled men and with more potential good

    1147
    for the country than almost any other industry in terms of dollars, and it is those terms which are the most important at the present time. It is vital in the immediate future to produce a practical plan under which the industry can work, not only to enable the Chancellor to make money but to make money in a much better way, by creating prosperity and selling power in the industry. For these three reasons I beg the Chancellor to accept the views that have been expressed in favour of the Clause being dropped for reconsideration.
    6.45 p.m.
    Colonel Oliver Stanley: I am sure the Committee are grateful to the hon. Member for East Middlesbrough (Mr. A. Edwards) for having started a Debate which has proved to be of the greatest interest. I do not propose to follow him in some of his observations, chiefly those concerned with the personal habits of the Chancellor, although I must say to the hon. Member for Rossendale (Mr. Walker) who said that, seen from the back, the Chancellor looks like six feet of solid democracy, that if he will come round to our side, he will see a quite different aspect. I think this Debate fails into two parts. One is the actual proposal put forward by the hon. Member for East Middlesbrough, that assuming the same amount of taxation to be raised under any new system as under this one, he pleads for agreement in finding a better way of raising it. The other and wider point, which has entered into most speeches and is one that I feel to be fundamental, is whether, if we are going to raise this amount of taxation, by whatever means, from the industry, it will be possible ever to turn it into an industrial exporting industry instead of the luxury trade which it has been up to now. Certainly, the motor car industry suffers very much from the history of its development. The motor car started as a luxury, it started as something which was beyond the reach of all except the well-to-do, and as such it incurred, quite properly, that taxation which is imposed upon luxuries of that sort. Having started that way, and having provided successive Chancellors of the Exchequer with increasing benefits, it became more and more difficult for them to see that the whole position had changed and that
    1148
    what had started as a luxury had rapidly become a necessity, and, but for the handicaps imposed upon it, might well have become the commonplace.
    I believe that within the next year, if there really is to be any substance in the idea that the motor industry is to contribute to any large degree to our export trade, the Government must make up their mind that there must be a drastic reduction, and they must risk—although I believe it might only be for a temporary period—a considerable loss of revenue. That may be impossible; if so, let us be frank about it and say that we cannot afford it, that we will go on treating it as a luxury, and drop all this talk about the motor car industry contributing substantially to our export trade. It is quite clear that, unless we can devise means by which a car suitable for export is also suitable for the home market, there will be no possibility of a substantial export trade. Of course, in the next year or two, when there are great shortages and when people are prepared to buy anything, it may be possible to get people abroad to buy something they do not really want, but that will be a temporary phase. That sort of shortage will disappear, and we shall be faced before very long with the same problem.
    I have had certain opportunities during the last year or two of visiting the Colonies, and I have seen the kind of road on which they have to operate, and the sort of cars they need. It is obvious to any one who goes there, as it is obvious to any one who talks to them, that the kind of car which is sold in bulk in this country, the kind of car you see when you go to the Lake District, is wholly unacceptable to them and wholly unadapted to their purposes. To them the higher horse powered, the more powerful and larger car, is a necessity. It may not be a necessity to people here, but we cannot deny that it would be an advantage and that if there were not economic handicaps in the way, the ordinary man would prefer to have a car of rather higher horse power and of rather larger size. It is not only those of the physical stature of the Foreign Secretary who sympathise with those owners of small cars who find themselves in the same position as the unfortunate sardine in a sardine box when the Government cannot provide the tin opener. I am sure this is the fundamental matter which the Government must con-

    1149
    sider in the next month or two. If we want an export trade, we must have not only a change but a substantial reduction in motor taxation.
    I pass now to the other branch of this discussion, on which I am not so sure. Assuming that there is to be no reduction in taxation, is there any advantage from the point of view of the export trade in having a new form of taxation dependent, apart from the fixed registration fee, upon a tax on petrol? That was put forward very convincingly by the hon. Member for East Middlesbrough. He was backed up by the hon. Member for Bolton (Mr. j Lewis), who comes from a constituency for which I have great affection, because one of my ancesters was beheaded there.
    Mr. J. Lewis: Outside the Swan hotel.
    Colonel Stanley: It is a town that makes mistakes from time to time. In the past I have, of course, argued and heard the case for the fuel tax as opposed to the registration tax. The difficulty I have always seen up to now is that if there is to be, as there is now, taxation based upon the penalisation of a luxury then the tax on fuel does not appear to be the fairest way of doing it, because the man who uses his car as a luxury, who takes it for a weekend drive round the Lake District, uses it less and therefore pays more than the man for whom it is a necessity, the doctor, the commercial traveller, and the user of a commercial vehicle. I have always regarded that as the difficulty in accepting this as a substitute. I could not quite make out from the hon. Member for East Middlesbrough whether that kind of person, the commercial users, who in the past have been very keenly opposed to this tax, are now included among those to whom he referred as now being in agreement.
    Mr. A. Edwards: All the haulage people are now in agreement for the simple reason that they would be able to save an enormous amount on the registration tax and would be able to carry more spare vehicles to work on the roads in an emergency.
    Colonel Stanley: That certainly is a new point. All I can say is that, if the assumption is that the yield from the tax is not to change, there cannot be saving for everybody. The hon. Gentleman said the hauliers are going to save a great deal.
    1150
    The man who has his car out only for week-ends will save a great deal; but if those classes are going to save a great deal, someone will have to pay more in order to maintain the total. But it is a very significant feature if in fact there is this measure of agreement. Hon. Gentlemen who have spoken from this side have not differed from that view. They have been speaking entirely from the point of view of what is the best alternative if the fuel tax, as such, is impossible. I do suggest that if agreement has been, or might soon be, reached, it might be a profound mistake to introduce at this period a new form of taxation which must inevitably affect design immediately. That might make it almost impossible for the right hon. Gentleman, after a further period for reflection and after being reassured as to the agreement, to see his way later on not only to change the method but to reduce the total. We might, if we took these steps now, cause manufacturers in the interval to do things which would make a later relief almost useless.
    I do not know what view the right hon. Gentleman the Chancellor of the Exchequer takes. It seems to me that a very good case has been put up for at any rate further consideration of this matter, and under those circumstances it seems to me that the best thing might be to leave taxation as it is for a period which, after all, can only be at the most another three or four months till the next main Budget, and consider between now and then whether it would not be better to cut out the step which is being taken now—a step which everybody agrees is some advance on the previous position, but which falls short, as everybody also agrees, of what we really desire—in the hope that next April the Chancellor may be able to take some more far-reaching steps which might enable the motor industry in this country to make an effective contribution to the export trade.
    Mr. Dalton: We have had a very interesting Debate, and the alternatives before us are relatively clear and not very numerous. I hope the Committee will not press me to continue longer in a state of indecison. Indecision as such is not a virtue. We have had much of it. The arguments have been deployed not once but many times, with minor variations, but they have not changed their essential

    1151
    character, and I hope the Committee will now agree with me that it is time we took a decision.
    I will try to state the case in as clear and compact a way as I can. The first question was: Do I or do I not want to maintain the yield of revenue from the motor industry? The right hon. Member for West Bristol (Colonel Stanley) suggested that we were maintaining the view which has hitherto been maintained, and which was strictly enforced by my predecessor with the full support of the Coalition Government, that this revenue is not a total which we can agree now to diminish. That is my view, as I said in my Budget statement, and I have not varied from it; nor have the Cabinet varied from it. My view is that we cannot afford to give away revenue for the present. None of these statements about not giving away revenue is final. They must, of course, be constantly related to the general budgetary position as we go from year to year and sometimes even from month to month; but as far as I can see into the near future, it does not seem to me that I should be justified in giving up the revenue in the aggregate which I obtain from the motor industry. There are many other claimants—groups of direct or indirect taxpayers—who, I think, should stand in front of the motor industry, and those who use motor cars, for some time to come. I should be disappointed if over the next five years one had to maintain so rigid a view for as long as that. Nevertheless, it is just as well to be frank regarding the next few years. The motor industry always want to be told where they stand. That is their catch phrase, and there is sense in it. Where they stand at the moment, in my considered view, is that they have got to go on giving the Exchequer as much revenue in the aggregate as now. If that is generally agreed, it is at any rate one point on which we can go forward—[Interruption]—and if it is not agreed, then it is decided in the habitual way in which we do decide things. That is the view I ask the Committee to accept when the time comes to reach a decision. I do not think we ought to be so defeatist as the right hon. Member for West Bristol seemed to be and to say that if the motor industry has to go on paying in the aggregate as much as now, there is no hope tor motor car exports. I think that is
    1152
    very much a matter of dispute, and I do not think it does justice to the spirit of enterprise which permeates a considerable part of the industry. [HON. MEMBERS: "Private enterprise"] I did not say there was no private enterprise anywhere.
    Mr. Jennings: The right hon. Gentleman seems to expect a great deal from private enterprise in spite of the hindrances to it, and to expect private enterprise to recover from the very difficult position in which he is placing it.
    7.0 p.m.
    Mr. Dalton: I do not put them in a difficult position at all. They were in the same position long before I was Chancellor of the Exchequer and long before the war. This trouble about motor taxation has been dragging on for nearly a generation, and the present Government certainly cannot be blamed for the immediate situation in which they find themselves. I am saying that I do not accept the defeatist view that with this revenue to be drawn from this great industry there is no hope for the export trade, nor do most of the manufacturers. Therefore, while agreeing that we must maintain the industry, I do not accept the suggestion that the industry cannot do more than 50 per cent. export business, or that with that total the industry cannot be in a quite substantial position.
    Now we come to the alternative ways of raising this revenue. The alternatives are fairly few and they are well defined. First of all there is the present tax. Some people who want me to give an example of indecision say that although everybody adimits that the present tax is all wrong and that the c.c. tax would be better, yet until we can reach agreement on a plan to replace the cylinder bore calculation we should go on thinking and talking and trying to arrive at some Utopia of unanimity. I do not think that is sense. Everybody, including my predecessor in the Coalition Government, with the full support of myself and those responsible, decided to get rid of the cylinder bore and substitute the c.c. Therefore I ask the Committee to rule out the cylinder bore and not to ask us to stay stuck in that admittedly difficult situation.
    What are the other alternatives? There is the c.c. tax and various variants of the petrol tax. Really there are four alternatives: the c.c. tax with the short steps,

    1153
    the c.c. tax with the wider steps, the fixed registration fee plus more on petrol, and the whole taxation on petrol without even a registration tax. Those are the four and nobody else has suggested anything additional. What I said in my Budget statement was that my mind was open as between c.c. with wide steps and c.c. with narrow steps. I did not say it was open as regards petrol. Indeed, I adduced certain arguments against the petrol tax, but I did say that as between the variants my mind was open. The case for the wide steps has, if I may put it so, gone by default in the Debate. Nobody has made it. Several people have put the case for the narrow steps. I think the arguments within the field of c.c. tax are fairly evenly balanced, and that is why I said I should like to listen to what had to be said today. Several hon. Members have put the case for the narrow steps and no one has put the case for the wide steps, and therefore I dismiss the wide steps. if it is to be c.c. it is on the narrow steps of too c.c.
    Mr. A. Edwards: I put it to the Chancellor of the Exchequer that on Second Reading he said that he and the previous Chancellor would accept a scheme which gave the same results, even if arrived at in a different way. The right hon. Gentleman said then that if I put down an Amendment he certainly would consider it, and, in fact, he went on to ask whether such a miracle could be performed as to get all the manufacturers of one mind, but I was allowed to understand that he was considering the position.
    Mr. Dalton: I am considering it, and I have given my reasons about it. What I was referring to was my main Budget speech, in which I adduced arguments against the petrol tax and, when I said that my mind was being held open, it was in relation to variants of the cubic capacity tax. The argument I would adduce is the following. There are two variants of it. One variant, which was put forward this afternoon, was to have, say, a £5 registration fee on all cars, large or small, and in addition to that to have an extra tax on the fuel. If we were to do that it would need an additional 4d., not 3d., on the fuel, and on top of the present 9d. that would make the tax on the fuel IS. Id. That, in addition to the £5 registration fee, would be required to give me my revenue. [Interruption.] We have
    1154
    worked it out and our arithmetic is faultless.
    Mr. J. Lewis: Is the right hon. Gentleman referring to the revenue of £86,000,000 or £90,000,000?
    Mr. Dalton: It is on the basis of the present revenue. I asked my advisers to tell me what would be required today to get the revenue, and what they told me was that the£5 registration fee, plus an additional 4d. on the petrol would give me the same revenue. There is the present duty of 9d., and 9d. and 4d. make Is. id., and that would be heavy.
    Colonel Stanley:That is on the present consumption.
    Mr. Dalton: Even if it is on the present consumption you could not expect to get it down. We are talking of the near future, and people are not going to get all the petrol they want, whatever we do in this matter of taxation, because petrol costs dollars, and we shall have to keep a pretty tight hand on petrol imports for some time to come. But this is really a deviation, and I do riot wish to pursue it, because it interferes with the argument. As I have said, a £5 registration fee plus an additional 4d. a gallon on petrol would give me the same revenue as now. My hon. Friend the Member for Rossendale (Mr. Walker) made an appealing speech and said a number of agreeable things, for which I thank him, but it really would be very difficult to do what he asks. Let us take the cases of some of the people who would be affected by such a plan. It is admitted that these petrol duties are not charged solely on petrol used in motor cars. There are the light hydro carbon oils, used, for example, in dry cleaning, paint manufacture and for various other industrial purposes. Is the hon. Member shaking his head? Unless he is going to propose a rebate—
    Mr. J. Lewis: Yes.
    Mr. Dalton: If we were to increase the taxation on petrol, and that on oils, that would have an effect on a large number of other industries, and then we would get claims for rebates. All sorts of people would be claiming. There is the doctor who needs his car and uses it a great deal, not merely for pleasure but in the course of his profession. There are the commercial travellers and the heavy com-

    1155
    mercial users of petrol. All these will want rebates, and one of the most essential reasons in my view for rejecting this proposal is that, as I have said before, it is going to benefit the black market at the expanse of the Exchequer. We shall be giving bits of paper to doctors or commercial travellers entitling them to get their petrol cheaper, and these will be traded, and unless we turn the whole of the demobilised Army into policemen and turn them on to a degree of inquisition which would be intolerable and ineffective we should not be able to control this black market, which would undoubtedly be generated by a far-reaching system of rebates accompanying a high petrol duty. That is the reason I gave in my Budget speech, and it is one of the most fundamental reasons for rejecting this particular proposal.
    There are other people who would be adversely affected. How right the right hon. Gentleman was in pointing out that if there is a total sum to be raised from the industry, and it is going to be raised in this way—and so many people are delightedly assuring my right hon. Friend that we are going to be better off and pay less, and, therefore, in favour of it—many people are going to pay more, and will not like it. I will give a few examples which have not been mentioned. Take ambulances, for instance; they use petrol for carrying sick and injured people. They will have to pay more for their petrol unless they are given a rebate, and if rebates are handed out we shall have to put up the price of petrol to the non-rebated people, since the total revenue has to be the same.
    Mr. A. Edwards: The right hon. Gentleman is putting simple arithmetic before us, but what he is not doing is to relate these comparatively minor difficulties to the colossal impulse such a change would have on the motor industry. Now is the time for the industry to design engines in the interests of our export and home trades.
    Mr. Dalton: Perhaps my hon. Friend will let me try to explain. I am endeavouring to give some examples. Rules of arithmetic still operate, even in a complicated situation, and my point is very simple. Either you are going to overcharge a large number of people for their petrol who will resent being over-charged,
    1156
    such, for example, as those who drive ambulances, doctors and commercial travellers, and so on, or you are going to allow them rebates. If you grant rebates two things happen; in the first place, you encourage black marketeering which you cannot check, and secondly, since you are rebating some, the standard rate of tax on others must be higher. It will not stop at is. Id.; it will go up considerably above that, and will hit all the non-rebated public.
    Lieut. - Commander Joynson - Hicks: Before the right hon. Gentleman leaves that point, may I ask if he does not agree that, so far as the business user is concerned, the figure of the additional 4d. per gallon is illusory because, so long as Income Tax is kept at 10s. in the £, the business user will be entitled to charge as expenses the running of a vehicle against Income Tax and, therefore, his petrol will only cost an additional 2d. a gallon?
    7.15 p.m.
    Mr. Dalton: I think I would rather not go into that now. The hon. and gallant Gentleman must have been away from our Debates because Income Tax is not going to be 10s. in the £. I am anxious to deal with the point as fairly as I can. I am endeavouring to adduce to the Committee arguments why such a system would fall inequitably on different parts of the country, and would land us into the double disadvantage of the black market, on the one hand, and a still higher cost of petrol for honest, unrebated people, on the other. That is what I call the modern petrol tax proposal, namely, a £5 registration fee and the rest of the revenue being placed on the cost of the petrol. Of course, many people want to go further than that. They say, "Put the whole cost on the petrol." If you do that the argument that I have been adducing applies in even more emphatic form, as I need not assure the Committee.
    Much has been said about the unanimity of manufacturers and the trade generally. I am not quite sure whether my hon. "Friend 'the Member for East Middlesbrough (Mr. A. Edwards) said this afternoon that manufacturers were now unanimous. I would like to be clear on that.
    Mr. A. Edwards: I was very careful to read what I said on that. There was cor-

    1157
    respondence between the trade and the Chancellor of the Exchequer and other statements have been made recently. The Nuffield organisation, the Rootes organisation, arid the Vauxhall Company have all said to me, personally, that if the Chancellor would accept fuel tax they would certainly support him.
    Mr. Dalton: I have naturally been going into the matter very fully, and, if I may, I would just read a few sentences from a letter which indicates that there is not only not unanimity, but that we are as far from unanimity as ever. Therefore, this plea for further indecision and delay is not well based. The letters says:
    "At this late stage it is wholly undesirable for the petrol versus the cubic capacity argument to be revived. Two Chancellors have said that they accept the c.c. tax. All that remains to be done now is to determine the steps, which I hope commonsense will dictate as being of 100 c.c."
    I have said that I accept that in view of the absence of any other suggestion.
    The Society of Motor Manufacturers and Traders, Ltd., as representing the motor manufacturing industry, has plainly come down on the side of the c.c. tax. Admittedly, there are one or two manufacturers who would prefer the petrol tax—as would users, agents and others who have no interest in export. But the majority of British manufacturers want the cubic capacity basis, and do not see why it is necessary to keep on harping about lack of unanimity in the Trade. The country, as a whole, is never unanimous about the kind of Government it wants, but, nonetheless, we get one that generally seems to work.
    "The old objections to the petrol tax remain—namely, with the present weight of revenue required. Revenue collected in the form of the petrol tax would cause us manufacturers to make fuel economy our fetish, which would result in cars with small engines, of low performance, highly stressed, of high compression and with constricted valve throats in order to achieve high mileage per gallon.
    "So, for heaven's sake, let us get on with finalising the c.c. basis in steps of 100 c.c., and then we shall know where we stand."
    That is a very powerful letter, and the man who wrote it is not going to change his mind.
    Mr. A. Edwards: That is a letter from Sir Miles Thomas. He used similar language to me because he said: "Do not let us start this controversy all over again." In the same interview he said, "If the Chancellor makes up his mind, that is acceptable to us." He has not said anything contrary in his letter. Obviously, they must know the form of
    1158
    taxation because they must design their cars accordingly. If the Chancellor could make up his mind, I am certain there would be unanimity.
    Mr. Dalton:This is a very good letter. As a matter of fact it is a copy of a letter written to my hon. Friend from Sir Miles Thomas and in view of my hon. Friend receiving this letter—
    Mr. A. Edwards: Sir Miles Thomas has not contradicted me.
    Mr. Dalton: Indeed, he has. It would be wrong to weary the Committee with reading the letter again. I read it very deliberately.
    Mr. Edwards: There is not one word in that letter against the fuel tax. Sir Miles Thomas simply said "Do not let us start a controversy again," and that is all.
    Mr. Dalton: This is a copy of a letter written on 22nd November—quite recently —to my hon. Friend who has been endeavouring to bring about unanimity, which would have been a miracle if he had done it. He has failed. This letter makes it clear that he has failed. I am not going to read it again. It will be on the official record and hon. Gentlemen interested will no doubt see it. I regard it as a very clear and cogent letter, whether we agree with it or not. I only make one comment on it. It is very illogical to talk as if fuel taxation has no influence on the design of the car. Any taxation has an influence on the design of the car in some way or other. The idea that you can detach the influence of the fuel tax from design is complete nonsense, and in the last paragraph which I read, Sir Miles Thomas gave an example of how an additional tax on fuel would influence the design of cars which, he submitted, would be very undesirable. He may be wrong or right. But that is the serious position which has to be considered. He has made up his mind, and the fact that he has made it up in this way is a sign that you cannot get unanimity. Therefore, I ask the Committtee to support the Government in the proposal which we have in this Clause.
    All the other arguments have been fully considered. No other arguments will be produced in four months, and it is desirable that we should arrive at some decision now. I cannot give any promise

    1159
    now to take less revenue from the motor industry, but I shall be very glad, as the years go on, and if I hold the office I now hold, to see whether, in the changing situation, there cannot be some alleviation of the total pressure on the industry. I am not going to commit the Government by promising this now, but it is something that I would like to do if circumstances are favourable in the next three or four years.
    Colonel Ropner: Can the right hon. Gentleman say whether Sir Miles Thomas was writing as an individual or writing on behalf of motor manufacturers?
    Mr. Dalton: He wrote from the Nuffield Organisation and signed it "Miles Thomas."
    Mr. J. Lewis: Can the Chancellor of the Exchequer say whether he would not agree that in reference to the point in this letter from Sir Miles Thomas, in which he explained that, in the event of there being fuel taxation, it might cause manufacturers to reduce the size of the engine in the interest of fuel consumption, that in view of the fact that fuel abroad is often much cheaper, he was only thinking of the home market and not the export trade?
    Mr. Dalton: I cannot agree, but that is what he said.
    Clause ordered to stand part of the Bill.

    CLAUSE 4.—(Amendment as to rate of excise duty on electrically propelled bicycles.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill,"
    Viscount Hinchingbrooke: I have to ask Members of the Committee to take their minds away from the subject of tours in high powered motor cars to their favourite beauty spot and to consider the power required for driving electrically propelled bicycles. I want to ask the Financial Secretary whether he will give some explanation of this Clause. I have consulted the Finance Act, 1920, and cannot locate paragraph (a) in the fifth line, and, therefore, I find it very difficult to place the special paragraph (aa) which is also referred to here. Can he, or the Minister of War Transport
    1160
    give some explanation of the meaning of the Clause. May I call attention to the way in which we are becoming accustomed to legislation by reference in Finance Bills? What we want to find out when we read the Finance Bill for the year is the state of the law in regard to finance in that year. We have in this Bill—it is true there is a tradition, which, I think, ought to be broken down—this constant legislation by reference. To take Clause 5 as an illustration, it says:
    "Section eight of the Finance Act, 1942, which provides for a rebate, limited to expire on the expiration of the Emergency Powers (Defence) Act, 1939."
    The explanatory parenthesis contains references to various Finance Acts which are unspecified, and one finds, if one refers to the Finance Act as long ago as 1920, that it says:
    "as modified or as altered by subsequent enactments."
    It is extremely difficult in reading through current Finance Acts to discover the meaning of Sections. I would draw the attention of the Committee to the general point I made about legislation by reference in Finance Bills, and I would ask the Financial Secretary or the learned Solicitor-General to explain it.
    The Minister of War Transport (Mr. Barnes): The point raised in the Clause is really very simple. Owing to the shortage of motor spirit during the war, a certain number of bicycles were converted to electrical propulsion. The range is very limited. There is no evidence that they will increase to any extent. The duty that has been charged has been on the lowest rate, 17s. 6d., and Clause 4 regularises a practice which has been in operation since this type of vehicle came on to the market.
    Colonel Oliver Stanley: I do not want to delay the Committee and I have no objection to the proposal, but no answer has been given to the drafting point raised by my Noble Friend, and some notice should be taken of it. This seems to be quite incomprehensible. I look through the first paragraph of the Second Schedule to this Bill and cannot find any reference to paragraph (a) at all. It would seem that the whole of this Clause is wrongly drafted and it should be looked at again. Perhaps the learned Solicitor-General would enlighten us on it.
    The Solicitor-General (Major Sir Frank Soskice): In the Act of 1920, in the Appendix are the words, "(1) Cycles," and after that there is a paragraph headed "(a) Bicycles."
    Colonel Stanley: What is the hon. and learned Gentleman reading from? I was reading from the volume of Public Acts.
    The Solicitor-General: One of us must have been given an unauthoritative text. The text I have taken is "(a) Bicycles"; you get "bicycles" against a little "a" in brackets; and Clause 4 of the Finance Bill we are presently considering requires to be put against that paragraph (a), a further paragraph (aa). There seems to he some discrepancy as to tax, and perhaps I should refer to it.
    Mr. C. Williams: I am sure that the hon. and learned Gentleman is no clearer on this matter than the rest of the Committee. May I ask the Minister of Transport why the necessity for taxing only a few bicycles when the amount is very small? Can he inform the Committee of the approximate number of bicycles and the amount? If there are only about half-a-dozen bicycles, it is not worth having a Clause. I cannot judge whether we should give the right hon. Gentleman this Clause until he says whether there is sufficient justification for putting a whole Clause into the Finance Bill in order to impose a tax of 17s. 6d. on a lot of very poor people, who so far have possibly been taxed by custom, or, in other words, illegally taxed, and who ought not to have been taxed at all.
    7.30 p.m.
    Mr. Barnes: I cannot agree for one moment that any of these people have been illegally taxed. The bicycle was subject in the first place to the tax of 17s. 6d. It was converted to electrical propulsion, and there has been no increase in the tax. Under the previous Finance Acts there was no provision for the same tax to be levied on this bicycle. Therefore, the practice I have referred to in regard to that type of vehicle was followed. This proposal merely legalises what has been in operation during the war. I have not the exact number, but it is not very large, no larger, probably, than the number of motor cars which have had gas bags put on top of them.
    Mr. C. Williams: I hope that between now and the next stage of the Bill the Minister can give us the number. I do not think the House should be asked to pass a whole Clause without knowing the approximate number of people affected, and whether it is worth while putting on the tax.
    Mr. Barnes: Certainly, I shall be pleased to furnish the hon. Member with that information.
    Lieut.-Commander Joynson-Hicks: The Minister's reply confirmed what was said by my hon. Friend that since the conversion of these vehicles from petrol driven machines to electrically driven machines they have been subject to the payment of an illegal tax. Surely that is a matter which requires explanation.
    Mr. Barnes: I cannot admit for a moment that they have been subject to an illegal tax. The vehicle was subject to taxation, and has been taxed on the lowest figure possible. It was quite permissible and legal to impose that tax. [HON. MEMBERS: "No."] Oh, yes. It was merely the sum that was in dispute, and the sum was fixed at the lowest figure.
    Mr. C. Williams: On what basis were these vehicles taxed before, as bicycles or as motor cars?
    Mr. Barnes: As motor bicycles of this particular type.
    Mr. C. Williams: Motor bicycles, without any motors.
    The Solicitor-General: I think I have cleared up the mystery of the Appendix. Perhaps hon. Members would be so good as to look at Clause 6o (6). They will see:
    "Any reference in this Act to any other enactment shall, unless the context otherwise requires, be construed as a reference to that enactment as amended by or under any other enactment, including this Act."
    That, summarised, means that when you see in the Bill a reference to another Act of Parliament, and that other Act of Parliament has been subsequently amended, you must read it as a reference to that other Act as subsequently amended. You do not have to look through the Statute Book to see what it is, but it is convenient to say that when the reference to it is

    1163
    made in the Bill then the reference is made to it in its finally amended form.
    Applying that to the case in question, I was reading the Appendix to the Finance Act of 1920, as amended by a series of other Acts, the Finance Acts of 1926, 1927, 1928, 1930and 1939. Therefore, when one looks at that Appendix one finds it in its present form after all these Amendments. In its present form, with all these Amendments in it, it has a subparagraph (a), to which I referred. Then, in Clause 4 of the Bill, one is directed to insert a paragraph (aa) after sub-paragraph (a), and you then have it in its final form. I hope that that explanation has made the matter at any rate reasonably clear. To summarise it: when you see in the Bill a reference to another Act, you see the other Act in its finally amended form. The finally amended form of this Appendix is as I have read it, when it has sub-paragraph (a).
    Mr. Godfrey Nicholson: Is there any way by which His Majesty's lieges can see how they are being taxed without reading through about 16 Acts of Parliament? Surely it is the responsibility of His Majesty's Government to make their legislation as clear as possible. I am intensely interested in these matters; is the Solicitor-General solemnly telling the Committee that nobody who has not read through about 16 Finance Acts can possibly comprehend the Government's legislation?
    Mr. Sydney Silverman: The hon. Member and I have been Members of his Committee for a long time, he possibly much longer than I. This kind of legislation has been in existence in this form also for a long time. Is the hon. Member telling the Committee that he has only just thought of this point?
    Mr. Nicholson: It has caused me countless sleepless nights.
    Mr. David Renton: I am a new Member of this House, and as such I would like to say that I stand apart from the point of controversy which has just been raised, and that, in common I suppose with most other new Members, one of the things I most looked forward to on entering this House was an opportunity of playing my part in improving
    1164
    the quality of legislation. I hope that is not an impertinent thing for me to say. The average citizen has felt for a long time that successive Governments—I say this although I supported them outside the House—have played into the hands of lawyers, accountants and experts of one kind or another whose business it has been to clarify those matters in our legislation, which were not clear even to the legislators themselves. If this is a suitable opportunity to draw attention to this matter, I am only too happy to have done so.
    The Solicitor-General: Perhaps I might say a word or two in reply to the last two speeches. As a matter of drafting—If we are discussing drafting—one is really faced with this alternative: Either you must have Acts of inordinate length, tremendously long Acts running into hundreds of pages, when you are dealing with highly complicated matters of taxation, or you must adopt the alternative of legislating by reference to other Acts. If any hon. Member doubts what I say, I only wish he would spend some time working in the office of Parliamentary Counsel and seeing the difficulties which they have to encounter. It is not with any desire to be obscure that this method is adopted, but because it is almost impossible to do anything with enormously long Acts. Some are so long as to be completely unwieldy, and any person who has to construe them will be in a dilemma. He will either have to search through hundreds of pages, or he will have to do what is more convenient and refer back to previous Sections. People who are expert in these matters, like accountants and solicitors, know how to find out, and how to use the ordinary index references and get back to the original Acts. There are ordinary systems of indexing which enable you to go through quite quickly, and to a person who is used to it it does not present any great difficulty.
    Mr. Nicholson: Perhaps I might suggest one other method to the Solicitor-General. This difficulty has cropped up in the course of legislation for a very long time, and Parliamentary draftsmen have found a very simple remedy, which is consolidation. If we are to go back 25 years as we do in this reference to the Finance Act of 1920, is it not high time that there was some form of consolidation?
    Clause ordered to stand part of the Bill.
    Clause 5 ordered to stand part of the Bill.

    CLAUSE 6.—(Amendment as to duty on oils used in refineries.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Viscount Hinchingbrooke: This interesting Clause extends over three pages. It has seven Subsections, eight provisos, two exceptions, three declarations and six separate references to various Acts of Parliament. I think the Committee should look for a fairly lengthy explanation of this rather lengthy Clause. What purpose does it fulfil in the Finance Act? There has been no Debate on Second Reading or on the Budget Resolutions, or anything in the Chancellor's Budget statement in regard to it. It is the kind of Clause which finds its way into the Finance Bill sponsored by outside organisations by direct negotiations with the Chancellor of the Exchequer, and hon. Members of this Committee are confronted with it for the first time during the Debate on the Finance Bill. Because there has not been any public discussion of the point and the newspapers have not taken any notice of it, and the Chancellor does not think fit to comment on it in any way in his Second Reading speech. Here we are, on the Committee stage, presented with our first opportunity of looking at it to see what it does and what effect it has on His Majesty's subjects, whether beneficial or otherwise. It is very difficult to tell, from the legal language of this Clause and from all the provisos, sections, declarations and references to other Acts of Parliament, whether this Clause has a beneficial effect on society or not, and whether our constituents are in any way aided or impeded through its passage into law. I, therefore, think we are entitled to have some explanation from the Solicitor-General.
    The Solicitor-General: The hon. Gentleman who has just spoken is, I think, under a misapprehension with regard to this Clause. The object of the Clause, I can say right away, is to give effect to the recommendations of what is known as the Ayre Committee. It has not been sprung upon the House in any sense. It starred with a speech by the right hon. Member for the Scottish Universities (Sir
    1166
    J. Anderson) on 24th April of this year, when, in the House, the right hon. Gentleman said he proposed to give effect to that Report. That Report, as I will indicate to the Committee, recommended that hydro-carbon oils which are required by chemical manufacturers for use in the process known as chemical synthesis should come into this country free of duty. The Report contains certain other recommendations, but that is the primary one. The right hon. Gentleman the Member for the Scottish Universities, on 24th April, said:
    "The Committee which we set up was presided over by Sir Amos Ayre, and hon. Members will find a full disquisition upon this important and intricate subject in the Committee's most able and useful Report which was published as a White Paper on 11th April. I propose to accept the recommendations of the Committee."
    That was my right hon. Friend's predecessor, and the present Chancellor, in his Budget statement, said this:
    "Hydro-carbon oil is a most important substance for the future of our industry, and the Finance Bill will include provisions to give effect to the recommendations of the Hydro-Carbon Oil Duties Committee, whose Report was published as a Command Paper last April, that imported hydro-carbon oils should be free of duty when used as raw materials in chemical synthesis, as it is called, and that an equivalent allowance should be made in respect of oils produced in this country and used for a similar purpose."—[OFFICIAL REPORT, 23rd October, 1945; Vol. 414, C. 1887.]
    This is the object which Clause 6 is designed to effect. I quite agree that it is not easy at first sight to indicate how that is brought about, but I will, if the Committee will allow me, endeavour to state how it does come about. The subject is, I am afraid, an intricate one, because it involves hydro-carbon oil duties generally.
    If hon. Members will look at Clause 6, they will see that Subsection (1) repeals the provisions of Section 2 of the Finance Act of 1934. Having repealed that, it then proceeds to bring in some provisions of its own. If I might, starting with that, I would like to say what happens when we repeal the provisions of that Section of the 1934 Act. What was the position with regard to hydro-carbon oils, apart from that Section? If we repeal that Section, we, of course, go back to that position, and it is material to ask what the previous position was. The

    1167
    position was this. Hydro-carbon oils, on importation into this country, are liable to an import duty of 9d. in the case of light oils and of 9d., subject to a rebate of 8d., and, therefore, a net duty of id., in the case of heavy oils. Actually, to complete the picture, heavy oils, which are used for road fuel, are liable to the duty of 9d. Therefore, the net result of that is that, apart always from the Section of the 1934 Act, on importation, light oils pay 9d. and heavy oils pay 1d., but, if used for road fuel, they pay 9d.
    Mr. C. Williams: Is there any difference between 4he substance used for roads and that used for agricultural purposes? Gould the learned Solicitor-General tell us the position with regard to heavy oil for fishing vessels?
    7.45 p.m.
    The Solicitor-General: I can tell the hon. Gentleman the position with regard to agricultural use, but I am extremely 10th to do so because I will digress from my point, which is difficult to follow. Perhaps I may continue with it and answer the hon. Gentleman afterwards. If I may continue with the history which I am trying to give, we started with that general position, but there is a complication which we have to superimpose on it. Oil that was used in a refinery was not charged on importation at all, but was charged under a different system set up by the 1928 Finance Act, and this was called the bonded refinery arrangement, which means that, when hydro-carbon oil is brought into the country and put through a refinery, it does not have to pay a duty when it is imported, but a duty is charged upon the product in which it emerges from the refinery. Hydro-carbon oil may be imported and go into a refinery and be converted partly into light oil and partly into heavy oil. The light oil pays 9d. when it comes out of the refinery and the heavy oil 1d., and that started with the 1928 Act. The different rates of duty prescribed by the 1928 Act were amended by the Acts of 1935 and 1938, and they finally assumed the form I have just mentioned, which was 9d. and 1d.
    In the early 3o's a fresh factor had to be taken into consideration, and this was that many hydro-carbon oils were used in a refinery but did not come out of the refinery in the form of light or heavy oils at all, but in the form of various gaseous
    1168
    products, and, therefore, as they came out in the form of gas products, they would not be subject to the import duty paid in the bonded refinery arrangement, and so we got this 1934 Act, which was designed—I warned hon. Members that it was a difficult matter to follow—to bring into the scope of the duty these gas products which were produced in the refineries. That Bill is designed to bring the making of these gas products under the terms of the duty, but to enable chemical manufacturers to import hydro-carbon oils into a refinery and use them for synthetic processes without having to pay the duty, and, in that way, to give effect to the recommendations of the Ayre Report. What was then decided was that the position should be left in statu quo—that it should be brought about that hydrocarbon oils which went into a refinery, and were used by chemical manufacturers for processes of synthesis, were not to be subject to duty.
    What have the draftsmen of this Bill done? Hon. Members will realise that it is extremely difficult to bring all this about, and I assure them that the draftsmen have not endeavoured to be obscure, but rather to be as simple as they can. The way they did it was this: they repealed the section of the 1934 Act so that they went back to the previous position. They then said, "We must bring in the gas but we must leave out oils which we want to use for synthetic processes." They did that in Subsection (2) because they said, "When you get any dutiable hydrocarbon oils upon which Customs Duty has not been paid because of the bonded refinery arrangement, if it is to be used for generating heat, light or power or for producing gas outside the refinery"—that is the phrase which refers to gas products—"you have to pay duty on it." But they make no reference to the oil which you are going to use in the refinery for the purposes of chemical synthesis. Having done that, what is the net result? The net result is an equation which achieves the object they want to achieve. You leave as they were the bonded and refinery arrangements in respect of oil coming out of the refinery in the form of light or heavy oil, so that is still subject to 9d. or 1d. per gallon as the case may be. Then you bring it about that the gas products are subject to tax—they are the ones described in the phrase "used for heat, light or power or pro-

    1169
    ducing gas outside the refinery." They are brought into the sphere of Customs Duty, but you have not referred to the oils which are to be used for chemical synthesis. The result is that they are not brought into the terms of the duty and they do not have to pay tax under bonded refinery arrangements. That is what is sought to be done in Clause 6, Subsections (I) and (2).
    Subsection (3) introduces a further very subtle complication which is not immediately germane to the point I was trying to make as to the direct object of the recommendations of the Committee. Therefore I do not propose to trouble the Committee with it because that would mean some considerable explanation.
    When one turns over the page and looks at Subsection (4), the object of that is to give effect to the other part of the recommendations of the Ayre Committee, namely, that hydro-carbon oils produced from indigenous material in this country, used for synthetic processes, should be given a preference equivalent to the amount of duty, that is to say, 9d. or 1d. as the case may be. If one analyses that Subsection, one sees that it does that. Again I do not propose to trouble the Committee by going through the paragraph, because it would need some considerable study to see exactly how it does it, but that is what it does. Then one gets to Subsection (5), which is simply a machinery subsection; it is a regulation-making subsection, which gives power to make regulations. Subsections (6) and (7) arc clear on their face. So the net result of this complicated apparatus is to give effect to the recommendations of the Ayre Report, namely, that chemical manufacturers shall be entitled to have their oil for the purpose of chemical synthesis, and chemical synthesis only, free of import duty charged in any way, whether under bonded refinery arrangements or on import; and also that there should be the preference which forms the subject matter of the second recommendation of the Ayre Report. In so doing, the Clause reflects what was promised by the right hon. Gentleman the Member for the Scottish Universities, and which was repeated in his Budget statement by my right hon. Friend the Chancellor of the Exchequer.
    Mr. C. Williams: I think the Committee owes the hon. and learned Gentleman
    1170
    very sincere thanks for the way in which he has made this statement. I would have asked one or two questions, but he has taken such pains with the Committee, and as I see the Financial Secretary here, I hope he will pass on to those concerned that it is a good thing there is at least one Law Officer who understands his brief.
    Clause ordered to stand part of the Bill.

    CLAUSE 7.—(Power to substitute regula tions for certain provisions of the Spirits Act, 1880,relating to dis tillers.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. C. Williams: I would like to raise one question on this Clause. It is a Clause which gives power to substitute regulations for certain provisions, and paragraph (b) specifies:
    "for relaxing the requirements of section ten of that Act (which provides that a distillery shall not be within a quarter of a mile of a rectifier's premises)."
    The Act referred to is the 1880 Spirits Act, I believe, and I would like to know whether I am right in assuming that under this Clause you can now have a distillery within a quarter of a mile of a rectifier's business. Am I right in that query? That, I believe, is the correct position. In other words, this has been going on since 1880. Now, after all those years, this is the first taste of liberty which this Government has brought about. I think this is a supreme thing, that four or five months after this Government have been in office they have at last done something, and all the wealthy people on the other side of the House who wish to build refineries and rectifiers' premises will have one less trouble than they had before, and with the great financial backing, which we have all been told about, they are now able to do these things. So the Tory Party have put enough pressure on the Government to bring about one small relaxation of a very old and very needless order.
    Mr. G. Nicholson: I wish to deal with this question in an even more serious spirit than the hon. Member for Torquay (Mr. C. Williams). I happen to be both a distiller and a rectifier, and I am in-

    1171
    deed gratified to know that I have received at least one instalment of that inestimable gift of liberty which it is in the power of the Government to give.
    I wish first of all to do something which I fear you may think out of Order, Mr. Beaumont, but I hope you will pardon me for two or three minutes. This is the first opportunity I have ever had as a distiller of paying a tribute to the Excise officers, and I would like to say that I welcome it. Distillers and rectifiers come into very close contact with the Customs and Excise authorities. The Excise officers are bound by most rigid and meticulous rules, and they could make themselves constantly difficult if they failed to co-operate. I have never known an Excise officer who was not extraordinarily loyal to his calling and to the duties of his calling but, at the same time, exceedingly co-operative. I think it is right in this Committee that a tribute should be paid to this branch of the public service. They have had more and more thrown upon them by the new methods of taxation, but they have never fallen below their high standards, and I wish this tribute to go on record.
    8.0 p.m.
    As far as this Clause is concerned, the reference at the beginning of it is to the Act of 1880. Contrary to what I thought when I first spoke on this subject a few weeks ago, the Spirits Act of 1880 was not debated in this House; it was a consolidating Act of the kind I was recommending to the Solicitor-General just now. It consolidated 23 different Acts, the first of which dated from King William III.
    I do not want to go into technical details, but if hon. Members will refer to Part I of the Third Schedule to this Bill they will see enumerated the Sections which it is proposed to replace by Regulations. I thought that I knew my subject, but after reading this part of the Bill I feel that I do not; so I humbly put forward the suggestion that it is time that the whole of this Act of 1880 was replaced by Regulations. I do not like regulation by Statutory Rules and Orders, but I think there is a case for it here, and if this is done by this Government, or a subsequent Government, they will save themselves considerable trouble. The whole operation of this Act is an example of the harm that can be done by relating
    1172
    fiscal needs to the technical processes of an industry. We have had an example of that on another subject, dealing with motor cars, and although it is true that this industry is not of such vital economic importance to this country, it has its own importance. The result of this Act and the very rigid Excise Regulations has been that, speaking generally, we are behind other countries, to some extent, in technical knowledge and adaptation with regard to distilling. I think that is a great pity, for we cannot afford to reject anything that will add to our export trade or commercial reputation.
    I hope that under the new Regulations greater scope will be given to scientific progress. For instance, there have been invented certain processes on the Continent and elsewhere by which alcohol can be recovered from the by-products of other processes in very small quantities from large quantities of liquids. The effect of the Excise Regulations in this country is that these methods cannot be used in this country, although it may well be that, in the near future, the production of alcohol may become even more important than it has been in the past. I do not want to go into details, but I will leave this thought with the Committee: It does not pay to hamper scientific and industrial progress by fiscal regulations unless it is absolutely necessary. I have nothing more to say about the rest of this Clause. I hope that the right hon. Gentleman will be able to explain it shortly. I am not asking this in any way to "pull his leg," because I know this matter is very technical, but perhaps he would give some explanation that deals with the points I have raised.
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): I quite realisethat the hon. Gentleman has no desire, as he said, to "pull my leg." This Clause and the two that follow it, certainly the second one, Clause 9, which is of a highly technical character, are of interest only to distillers and others interested in the spirit trade. I would like to say how much I agree with him, in the tribute he paid to the Excise officers. They have, always, done a very good job of work, and I was delighted to hear that tribute paid to them. The hon. Gentleman asked why the Act of 1880 was not going to be repealed. He suggested that the whole of the matters covered by the 1880 Act should be dealt with by Regulation in the

    1173
    same way as this Clause proposes to do so far as distilleries are concerned. The short answer is that the 1880 Act, as he himself said, covers a very wide range and although one day, I have no doubt Parliament will devote attention to this matter, that time is not yet. It is quite impossible for the Government at this stage to repeal the Act and do the whole thing by Regulation. The reason why this Clause is here is a very simple one: During the war the output of the distilleries, particularly of industrial spirit to which this Clause refers, has been controlled by the Ministry of Supply, and the experience of the war years has shown that it is possible for the Revenue to keepcontrol—
    Mr. G. Nicholson: May I correct the right hon. Gentleman? This Clause covers not only industrial spirit, but to potable spirit as well.
    Mr. Glenvil Hall: Yes, it applies to potable spirit as well. It empowers the Commissioners of Customs and Excise to make Regulations in substitution of certain provisions in the Spirit Act of 1880 which relates to distilleries. Distilleries have, during the war years, not been subject to the regulations and limitations which were imposed upon them, and still are, under the 1880 Act. Under these it is not permissible to brew and distil at one and the same time. It is also part of the regulations that a spirit store has to be established some distance away from the distillery. It is now found that although these Regulations, which may have been necessary years ago, are, under modern conditions, no longer necessary. As a result the Committee is now asked to agree to this Clause, which will enable part of the Act of 1880 to be repealed, and new Regulations more modern in their application to be introduced. That will permit brewing and distilling to be carried on at the same time if that is thought desirable; and other Regulations to be introduced will bring the processing more in keeping with modern usage. It also means, as the hon. Member for Torquay (Mr. C. Williams) said, that the Regulation requiring that a distillery shall not be within a quarter of a mile of the rectifier's premises can be relaxed in suitable cases if that is necessary.
    Clause ordered to stand part of the Bill.

    CLAUSE' 8.—(Increased penalties for offences under the Spirits Act, 1880.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Sir W. Wakefield: There are two short questions which I would like to ask the Financial Secretary to the Treasury. The first is on Clause 8 (I) that the £500 incurred is to be increased to £1,000. May I ask on what basis that increase is made? Is it because money now is only about a half or one-third of what it was in 1880, or is it meant really to increase the severity of the fine? If that is the case, surely it ought to be of the order of £2,500 or £3,000 if it is desired to bring it into relationship to what it used to be? The second question I want to ask is, Why is the fine under Subsection (2) being increased from £200 to £500? That is not in the same proportion as the increase in the other fine from £500 to £1,000. If it was the increase would have been from £200 to £400. What is the basis of all _these figures? Is there any reason for them, and is there any general principle behind the increase? It would be helpful if the Committee could be informed what is behind the Treasury's mind in this matter.
    Mr. G. Nicholson: As possibly the only Member of the Committee who may be called upon to pay the fine, I feel it is rather a delicate subject. I take it that the first fine is punishment for illegally having and using a still, because it leads to a very dangerous evasion of the Revenue, and is something which should be fallen upon most heavily. I do not see the purpose of the increase of the fine under Subsection (2), except, of course, that the court would not inflict the maximum fine unless the offence had been committed with deliberate intent to defraud. I am sure that the Excise will be perfectly fair if any distiller makes a mistake, but I hope that these fines will not be further increased.
    Mr. Glenvil Hall: The value of money has altered, as the hon. Member for St. Marylebone (Sir W. Wakefield) said. But that is not the prime reason for this change. We are dealing here with the old Act of 1880, and the Committee may care to be reminded that Excise duty on spirits then was 1os. a proof gallon. Now it is something just under £8. There is an

    1175
    enormous difference between the two figures. Compared with the vast increase in the duty the penalties which were in the 1880 Act are not now really sufficient for the offence, should it be committed. As the hon. Member for Farnham (Mr. G. Nicholson) said, the first penalty, which has been increased to £1,000, relates to a person who distils spirits without a licence—a serious offence against the Revenue. The second offence is not so reprehensible. It relates to a distiller who removes, without a permit, spirits from approved premises within two miles of the distillery in which he carries on the business of a dealer. Relatively this is not so great an offence as that of illicit distilling. That is why the penalty is less. Nevertheless, when we increase the one, to bring it into line with the increased duty, so the penalty for the second offence should also go up.
    Mr. Gallacher: I have a feeling that it would have been much better, instead of adding £500 on to the fine, to take £500 off it. It has often been said, particularly on this side of the Committee, that one of the most effective means of dealing with war is to take the profit out of it. One of the most effective means of dealing with the drink problem would be to take the profit out of drink. The best way would be to allow every man his own still. Representatives of brewers and distillers talk about the freedom of the working man. They argue that there is as much deleterious content in tea or coffee as in whisky or in beer, but if one puts up the argument in favour of every man having his own tea pot, his own coffee pot and his own still, they say that that is going too far. I would also suggest to the Minister on this Clause another method of getting taxation in connection with spirits. Not only should licences be issued for distilling spirits but also for materialising spirits. That would be a better method of dealing with the question than the Witchcraft Act, and the Chancellor would get some money out of it in the process.
    8.15 p.m.
    Mr. C. Williams: I am not sure whether I am in full agreement with the hon. Member for West Fife (Mr. Gallacher) about licences or not. He is Scottish and I am Cornish. I think the Scottish people differ from us in that they do not mind
    1176
    how many big fines they pay, whereas we in Cornwall prefer to smuggle the whole of our stuff rather than have the trouble of distilling it. When one looks at what happens in the Courts today and reads ones daily paper one finds that here it is the fine for a very small offence against the Customs which is being raised. It may be a very severe offence against the Treasury. It may be an offence which is large in monetary sense, but breaking the law in that sense, while obviously wrong, is surely not as wrong as many other matters, such as assault and many of the things one sees happening in police courts every day, for which a comparatively small fine is imposed? When we begin to pile up fines in the way that this particular Clause does, regardless of the sort of fines other people are paying for other offences, which are much worse, at any rate morally than the particular form of offence here dealt with, I think it is tending to create a certain amount of disrespect 'for the fairness of the law itself. The figures set out may be only maximum fines, but just because the Government is bringing in an inflationary policy it seems unnecessary, if we have been able to go on since 1880, suddenly to lay down these colossal fines at this time. I can only think the penalties for these offences have been increased in both these cases, not because of the badness of the people who commit them, but rather as part of the austerity which this Government is trying to enforce in various forms of hardship on every section of the community.
    Lieut.-Commander Braithwaite: The last two speakers have somewhat widened the scope of the Debate, and have shed a little additional light. I am bound to ask the Financial Secretary whether he can tell the Committee, before we part with this Clause, whether the offences under this Act of 1880 have in fact increased of late. I ask, only by way of elucidation, why under Subsection (1) is the fine doubled and under Subsection (2) multiplied 2½ times? Is it because offences under Subsection (2) are greater than those under Subsection (1); otherwise why is the proportion of increase greater than under Subsection (1)? It seems a little odd that there is this difference in the ratio of increase in the fines. Leaving out of account all the arguments of my hon. Friend the Member for Torquay (Mr. C. Williams), who pointed to the inflationary slope on which we are now sliding

    1177
    —it would not be in order to develop that any further—we would like to know whether there has been an increase in these offences, and whether any of them come within the sphere of operations which we know colloquially as the Black Market? I would be grateful if the Financial Secretary could say a few words in elucidation.
    Sir W. Wakefield: Can we not have a reply to that point? The Committee want to know if there have been recent increases in offences. Presumably those increases in the fines required under this Bill arc because there have been increases in offences or something of that kind. I think the Committee are entitled to know whether that is one of the reasons. I asked the Financial Secretary certain questions and he did not answer them. Is there any valid reason why he should not give an answer?
    Mr. Attewell: Why this solicitude for breakers of the law? Is it a variation of the point made by an hon. Member when we were dealing with the question of Scotland, that salmon poaching was breaking the law, but was not a sin?
    Sir W. Wakefield: It is not a question of solicitude. I asked whether the fine should not be £3,000, £4,000 or perhaps £5,000. I asked what was the principle behind this and also if we could have an explanation in reply to the hon. Member for Farnham (Mr. Nicholson) who asked whether there had been an increase in offences. That is a reasonable question.
    Mr. Glenvil Hall: The story goes back to 1943 when Sir Kingsley Wood, who was then Chancellor of the Exchequer, set up a Committee, I think it was known as the May Committee, which made certain recommendations. Later the ex-Chancellor of the Exchequer, the right hon. Member for the Scottish Universities (Sir John Anderson) indicated that he intended to implement these in his Finance Bill this year. The proposals were dropped from the first Finance Bill for reasons known to all of us. The present Chancellor of the Exchequer is now implementing the main conclusions come to by that Committee, some of which arc already dealt with in Clause 7. It was thought whilst the House was dealing with this matter that as these penalties were
    1178
    fixed, as I indicated in the brief speech I made earlier, when the basic excise duty on spirits was only l0s. per proof gallon though it has now gone up to something like £8, the opportunity might be taken to alter the penalties imposed under that Act. It is not because the number of offences committed have increased but simply that it was felt by the Government that the occasion should be taken to bring the penalties into line with the conditions now existing.
    Mr. C. Williams: This simply means the pure undiluted love of the present Government for penalties and nothing else.
    Mr. G. Nicholson: I have just looked up the Section in the Act of 1880, and at first sight, unless I am making a great mistake, there is no mention of £200—
    Mr. Gallacher: Read it over tonight and come back tomorrow.
    Clause ordered to stand part of the Bill.

    CLAUSE 9.—(Cessation of certain allow ances in respect of spirits.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Sir W. Wakefield: I want to ask the Financial Secretary if lie can explain the reason for this Clause. It starts by saying:
    "As from the first day of January, 1946, no allowance shall be payable."
    Then, under paragraphs (a), (b), (c) and (d) certain items are enumerated. Could the Financial Secretary explain why no allowance is to be payable in respect of these things? Presumably there were very good reasons before why allowancs were paid. Why is it that now they are not to be so payable? I am sure the Committee would be grateful if he could give an explanation before introducing this Clause.
    Mr. G. Nicholson: Personally, I am satisfied that these drawbacks should not be paid any more. If the Spirits Act of 1880 is to be revised, as we think it is, there can be no justification for these drawbacks. I do not want to go into the history of drawbacks, but I want most seriously to call the attention of the Government and the Committee to the position with regard to industrial alcohol. It is a position which needs careful attention.

    1179
    It should be decided whether the production of industrial alcohol in this country is an economic and commercial necessity, or if it is not. There is, possibly, the prospect that it will be proved cheaper to produce the spirit abroad and bring it here rather than to bring the raw material here and produce the spirit here.
    Mr. Glenvil Hall: If I might answer the last speaker first, I would say to him that the Government have in mind the point he raised. As he knows a certain amount of work has been done in some of the Colonies in this direction to see the extent to which, if at all, molasses can be fermented and the spirit manufactured there. That is perhaps not a matter to go into tonight but I can assure him that it is not being lost sight of. There are some Colonies that have a single crop where an industry of this kind might indeed be a Godsend.
    My hon. Friend the Member for Marylebone (Sir W. Wakefield) asked why this Clause was necessary. The answer is that these drawbacks are now no longer being given for the simple reason that we have agreed to Clause 7. These restrictions and limitations are no longer to be applied to distilleries and that being so, it is felt that their cost of production will not be what it might be and that therefore these drawbacks should cease; Clause 9 implements that decision. It is also in line with the findings of the Committee which sat on this matter and the three Clauses should be taken together as one whole.
    Clause ordered to stand part of the Bill.
    Clause ro ordered to stand part of the Bill.

    CLAUSE II.—(Release of imported goods.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Colonel Erroll: The Committee will, I am sure, regard this Clause as an admirable one since it attempts to eliminate a certain amount of red tape. The purpose of this Clause, as I see it, is to enable importers to go ahead and distribute the goods into this country, without having them held up whilst arguments and discussions go on relating to the precise kind of duty to be charged. We had during the war people
    1180
    saying, "Let us get a move on and we can settle up the paper work afterwards," and in general that probably has worked extremely well. No one wants action to be held up while paper procedure is argued over when probably a better decision can be reached when the matter is not treated so urgently, but therein to my mind lies a serious danger, and I am sorry to see no provision is made in regard to the danger in this Clause or in all its Subsections.
    8.30 p.m.
    The danger is that there is no time limit for the operation of the delayed Clauses. It says:
    "Where it is impracticable -immediately to ascertain whether any or what customs duty is payable … the Commissioners may … allow the goods to be delivered"
    upon payment of a deposit. Subsection (3) says:
    "Where the goods are allowed to be delivered under this Section, the Commissioners shall, when they have determined the amount of duty which in their opinion is payable, give to the importer or his agents a notice specifying that amount."
    I suggest there ought if possible to be some time limit between the permission to deliver the goods and the presentation of the final figure which the commissioners agree upon. Otherwise, we shall have what happened so often in the Service Departments and other Departments during the war, of paper work stretching back several years into the past with numerous changes in personnel, making it difficult to reach a final conclusion in the matter. These delays are all the more irritating where the amount involved is small. But it is the question of the amount that is involved which is another defect in this otherwise admirable Clause. It says in lines b and 7 that the goods may be delivered
    "upon the giving by the importer or his agent of security for payment of the duty by deposit of money or otherwise to their satisfaction."
    That does not give any indication—and I would like some explanation on this point —whether the deposit is to be in inverse ratio to the trustworthiness of the importer or his agent, or whether it is to bear some relation to the figure which it is estimated will be finally decided upon. If the former, then the amount of money to be paid when the final decision is made may be very great, or if the latter, it may be

    1181
    some trifling amount which will cause a good deal of irritation, and it will be a long time before its exact extent is decided upon. I do not wish to delay the Committee further, except just to draw the attention of the Committee to those two points and to express the hope that some satisfaction may be given regarding them.
    The Solicitor-General: I think the answer to the hon. Member's points is really to be found in this: This practice as laid down in Clause II is, in point of fact, the actual practice that has hitherto been followed by the authorities. The reason for Clause II being in the Bill at all is that, having followed their practice for some considerable time recently, they have had occasion to doubt whether there was statutory justification for their doing so; in other words, whether there was any statutory justification for their departing from the strict enforcement of the requirements in favour of allowing some latitude. Therefore, this Clause is introduced to make that practice legal.
    With regard to the two specific points which were mentioned, one the time limit and the other the amount, I would say this. It is extremely difficult to lay down a time limit in these circumstances. It obviously has to depend very much on the circumstances. One has to rely upon a certain amount of mutual good will on both sides, and I would remind the hon. Gentleman that before the commissioners can let the importer know what he owes, they have to wait until he furnishes to them the balance of the information which they require. That will be found at the end of Subsection (2):
    "… and in that event the importer or his agent shall supply the remaining particulars as soon as may be to the Commissioners."
    So they have to wait for him and send the notice saying how much is payable. In practice, therefore, it depends upon the importer himself. I would urge upon the Committee that it is extremely difficult in circumstances of this kind to lay down a specific rule. It has worked well in the past, before the practice was regularised, and there is no reason to suppose that it will not work perfectly satisfactorily in the future.
    With regard to the question of the amount of the security, that again is a matter for the commissioners to determine reasonably having regard to all the circumstances. There may be circumstances,
    1182
    without trespassing on invidious grounds, in which they think it right and their duty to find a higher security, and that may have some relation to the credit and trustworthiness of the importer. That will be for the commissioners to determine. There again, the practice embodied in the Clause is to determine what is fair and sensible in the circumstances. Sometimes they may be content with less security than others but I ask the Committee to accept that that has to be left to their common sense and fair judgment in the circumstances of each individual case.
    Clause ordered to stand part of the Bill.
    Clause 12 ordered to stand part of the Bill.

    CLAUSE 13.—(Income Tax for 1946–47.)
    Captain Crookshank: I beg to move, in page 12, line 30, leave out from the third "the," to end of line 44, and insert:
    "Table in Subsection (I) of Section seven of the Finance (No. 2) Act, 1940."
    Let me say straight away that I recognise that the wording of this Amendment may not be apt for the purpose intended, and it may be that it should have been drafted in another way. I tell the Financial Secretary that, because I hope he will not try and argue the case on that. If he is prepared to accept the spirit of it, and what we intend, I am quite prepared to leave the drafting of it to the Government draftsmen. The object we have in mind is to call attention to the changes in the Surtax, and to the fact that while the standard rate is being reduced, not this year but in the next financial year, Surtax steps are being altered. First of all, the steps are being altered and the effect of what is being done by the relief in the standard rate of 1s, is that the Chancellor is giving something with one hand and in some cases taking back all of it to all intents and purposes with the other hand. It therefore raises in our minds the whole question of the very high taxation of higher incomes and earnings, and we think that the Committee and others outside the Committee should pay some attention to what, in our view, are some of the evil consequences of that action.
    It is the fact that very often when a Chancellor takes off taxation in a Budget he looks round and puts on more taxation somewhere else, because he is aiming at

    1183
    a balanced figure. Our experience in the past has often been, for example, that it has been tea's turn one year and whisky another, and so on, and there has been a certain alteration in order to balance budgets. The question put to the Chancellor as to why he should not do something else has always had the reply that he cannot afford it because it would unbalance the sum that he wants to arrive at in the finish. That argument cannot be adduced on this occasion because the Chancellor's estimate of what this increase in surtax is going to be is some £7,000,000 a year, and yet in his Budget he said that the sum total value of the various Income Tax reliefs was£322,000,000 —
    Mr. Dalton: Gross.
    Captain Crookshank: Yes, gross—and £7,000,000 gross in the Surtax. Seven as to 322 does not make an argument of it. Not only that, but of course in the Debate on the Vote of Credit the Chancellor said he had no idea how much of the Vote of Credit was going to be required, and he might very well fall £200,000,000 or so under what he was asking for. I merely state those figures to show that the stock argument about having to balance or take one thing into consideration with another, or what the expenditure is going to be, does not arise at all. Therefore, we look to see why the Chancellor should have taken this action. That does raise various questions which I want the Minister to look at.
    There may be all sorts of theories in the Chancellor's mind. It may be that no one should have a net income over a certain level whether earned or unearned. It may be that he wants equality at whatever level and not quality on the lines mentioned by the right hon. Member for the City of London (Mr. Assheton). It may be that it does not matter how much or how hard a man or woman works, or how much or how greatly skilled a person may be, or how much they have earned at the end of the day, they must still only retain a very small maximum portion of those earnings. It may be that he does believe there is no incentive value in lower taxation though to be sure he does, by the reliefs he has given, indicate that he gives some weight to the argument used during
    1184
    the last two or three years that the burden of taxation on the lower incomes is resulting very often—I read all about this in the papers—in men and women not working the full overtime that they might ordinarily have done because they do not want to get into the higher Income Tax rate. If there is any truth in the statement there has been a decrease of incentive among workers paying taxation at the lower levels, the same would apply to the higher levels. But whatever the Chancellor has at the back of his mind, this I think remains true, that you get to a state of taxation being so high that you encourage gambling, and evasion and on the other hand you discourage the taking of risks—that you discourage skill and discourage savings.
    It is these four points which I would like the Committee to look at for a minute. If you take taxation to too high a level you do invite and encourage gambling. I am sorry to say so but it is undoubtedly true from all the evidence you get that there is a great increase in betting and gambling throughout all sections of the community. As a matter of fact it is almost bound to happen I think where there is over-taxation. I must say that I never expected to live to the day when I should hear two hon. Members of the party opposite explain to us just exactly how easy it was to go in for gambling and make money. They both told us how for years they had played the Stock Exchange and had been clever enough to get out at the right time, and fortunate enough not to go back again. I see the Chancellor by his smiles is congratulating his friends. How times are changed. But the fact remains that there is undoubtedly a certain amount of gambling which is stimulated and encouraged by the high level of taxation on the higher levels of incomes.
    The second thing which you encourage is evasion. There is no question about that. As a matter of fact this is the first Finance Bill for years, in which there are no anti-evasion laws, so that it looks as though, between us, we had stopped up all the holes—
    Mr. Dalton: For the moment.
    8.45 P.m.
    Captain Crookshank: Yes, for the moment. It is quite true that the House has done its best to deal with these illegal expedients. There are always borderline

    1185
    cases, where clever people try to find devices by which they can avoid taxation and Parliament does its best to stop them for the time being. All this is the result of high taxation. There are also the sort of transactions that we read about in the papers and the actions of certain people which really are nothing but downright deceit. I am sure the Chancellor will have official information about the black market, where people pay very large sums in notes of l0s. or £1. That is not done for convenience whatever else it is done for and it is obvious I should think that it is some form of evasion. By not having books or records they can presumably escape the inspectors and collectors of taxes. Then there is the third way in which you encourage evasion and this perhaps is more widely exercised than those illegal or semi-illegal acts. By having too high a level of direct taxation you tend to encourage the claiming of perquisites as part of a salary.
    The Chancellor was for a long time at the Board of Trade, and I am sure that in that office he must have heard of many people who were working during the war in business or as temporary civil servants and who did not take any salaries. They said they would prefer to have it all in travelling allowances, housing allowances and so on. I remember hearing of someone who actually asked to be paid in petrol coupons. That was a facility that was very valuable to him and enabled him to travel in a car instead of in crowded trains or buses.
    Mr. Dalton: The coupons would of course be issued by the Ministry of Fuel and Power.
    Captain Crookshank: I am not sure where they came from, but he paid for the petrol. Anyway, that is what happens in cases where the incidence of taxation is too high. For that reason the people most strictly concerned cannot be sure what such people are actually receiving. Shareholders cannot be certain what the director or the managing director or the chairman is getting because of what is being claimed and paid in allowances which do not appear on the balance sheet. The same is even true of this House. I am sure the right hon. Gentleman will acquit me of using an example because
    1186
    I am afraid it may come home to him, yet it is a simple example. A salary of £5,000 has been considered by this House as the right sort of salary for people with great responsibility. It is the salary which the judges of the High Court get, the salary which Ministers get and in almost every one of those cases where we set up a board or a corporation, the paid chairman receives a similar amount. It is considered the kind of income which should be received by such people for their hard work, to enable them to live in sufficient comfort.
    Mr. Gallacher: I am interested in this.
    Captain Crookshank: It is leading up to a point which I think will interest the hon. Member even more. In 1938/1939—and I thank the Financial Secretary for letting me have these figures—I looked to see at what level was the Surtax and how much was left at the end of the day when all the taxes had been paid. In this case a married man, with no children, earning £5,000 a year was left with £3,500 a year in 1939. That was the case with judges, Ministers, the chairmen of corporations, the heads of big business firms, and so on. In those days Ministers of the Crown had no official motor cars, with the exception of two Ministers, the Home Secretary and the Postmaster-General, both of whom had official cars for very special reasons. Official cars were not provided for other Ministers, and presumably the assumption of the House was that if a Minister thought he required a motor car, he could get it out of the £3,500 that was left of his salary of £5,000. That was the generally accepted thing. When we come to the new rates in the Budget statement, the £5,000 a year man will be left with £2,413, that is to say, about £1,000 a year less than he would have got in 1939 if he had been in the same position. That is a big drop. Coincidentally with this—and this is the point—we heard a few days ago, in reply to a Question, a statement by the Chancellor of the Exchequer, to which no great attention was paid at the time, that in future Ministers would have official motor cars.
    Mr. Dalton: Ministers of Cabinet rank.
    Captain Crookshank: Yes, Ministers of Cabinet rank are to have official motor cars. One might deduce from the fact that in the last pre-war year they had

    1187
    £3,500 net, while in this first post-war year they have £2,400 net and are to have a motor car, that the motor car is being produced because it is assumed that they cannot run it on the £2,400. Instead of getting another £1,000 they are to be provided with a motor car. This is the whole point that I want to make about perquisites. If the Government had taken the other view and said that before the war the net income of the £5,000 a year men was £3,500, and that, in spite of the changes in prices, they thought those men could live on more or less the same scale, with the same facilities as they had before the war, if they still had £3,500 net, then on these figures they would have to be given a salary of £10,000 a year. When the Chancellor comes to the House and says at Question Time that Ministers of Cabinet rank are to have motor cars, nobody says anything; but if the right hon. Gentleman had taken the other view and brought forward a Bill to raise all Ministerial salaries to £10,000 a year, the House, and the country, would probably have been rather surprised. Yet I argue that it is exactly the same thing, and that is the danger. I hope the Chancellor will not mind my taking this as an example. The same thing applies throughout industry—probably very much more so, according to some of the things I heard in my time at the Treasury, as probably the Chancellor has heard in his time. The result is that people do not know what remuneration, what gross advantages, facilities and so on are being received. All this is part and parcel of having too high taxation on the higher ranges of income.
    Those are the only two arguments I want to put to the right hon. Gentleman. First of all, as is admitted, he is encouraging gambling. He is encouraging evasion, whether it is dishonest evasion or evasion that is doubtfully legal, or whether it is those vague cases which are not evasion, but come within the field of perquisites. On the other hand, let the Committee consider what the right hon. Gentleman is discouraging. He is discouraging a great number of people from taking genuine risks with their own capital. If a person risks his capital in an enterprise and the enterprise goes wrong and he loses his capital, he hopes that things will change, and that next time he will be more fortunate; but if next time he is
    1188
    more fortunate and makes a considerable sum, and then is allowed to retain only a minute fraction of it as income, he will be tempted to say, "Why should I bother about risking my capital at all?" But if capital is not going to be risked, how is the country to be able to introduce new and untried methods of business or production? Obviously, however much the State may go into business, it will leave that sort of thing to somebody else. I hope, at least, it will not enter into purely hazardous and semi-gambling enterprises. On the other hand, unless somebody does so, a great deal of new production and a great many inventions will never see the light of day. There is a risk that that situation will arise if there is discouragement of the genuine taking of risks with capital.
    The right hon. Gentleman is also discouraging saving; in fact, he is making saving almost impossible. If the right hon. Gentleman wereable—which he is not—to analyse the different amounts which were put into War Savings Campaigns, the whole object of which was to get savings out of income, by those with very large gross incomes, he would find that they put in little, because they had very little to save. The overheads, after their sheer living expenses, did not enable those people to put in the sort of savings which ordinary folk would have thought very probable on looking only at their gross incomes. There is one other risk that is being taken. It is that the full use of skill and enterprise is being discouraged. The time will come when the business man will say, "No, I will not take on any more jobs; the President of the Board of Trade wants me to go on to some semi-governmental organisation which will take up a lot of my time and to which not very much remuneration -is attached; I would like to do that as a service, but it will take up so much of my time, and if I cannot in the time that is left to me make enough to live on and save for my old age; I will take the easier course and cut off some of this heavier work." [Interruption.] The hon. Member opposite was not present at the beginning of my remarks when I spoke about the incentive on all ranges of taxation being something about which we must be very careful.
    9.0 p.m.
    The other difficult case is that of the professional man. Take the case of a

    1189
    surgeon who has come right up, has started in the elementary school, as many have, and who has this great gift of God in his hands, or in his eyes, by which he can perform wonderful operations. There is only a small period in their lives when such men have accumulated sufficient experience to be right at the top of their profession. The same thing is true of the legal profession. A surgeon during those years—and a part of his time will be taken up with the services which surgeons freely and voluntarily give to the hospitals—will hope to make sufficient income to recoup himself for his training expenses and to put enough by to provide a sufficient income for himself in old age. If the tax is too high during that critical period of his life and he cannot on that account put by what he was hoping to put by for his old age, what is the temptation which he is up against? It is a very obvious one. He will keep on too long at his job, after his hands have lost some of their skill, after his eyes are not as good as they might be. That is a danger; and it is the sort of thing that has to be watched.
    What the Cohen Committee said about company directors furnishes a very good case in point. They recommended that directors should have to give up at the age of 70, and presumably so many old hands stay on for the reason I have given. I said "presumably" and it is a perfectly reasonable assumption. If a man during his working life has been so highly taxed that he is unable to put by enough for his old age to live in the way he hopes to live, it is not unlikely that he will keep on at his job too long in the hope of earning a little more, or possibly he may even die in harness and never have any old age in which he is a pensioner.
    These are considerations which should be borne in mind by any Chancellor of the Exchequer in these days. I would repeat them: the encouragement of gambling, the encouragement of evasion, and the discouragement of genuine savings and skill and enterprise. If this country is to go full steam ahead and make some progress in this great new world about which the right hon. Gentleman talked we shall need all the skill, all the enterprise and all the work that is possible. Everybody is entitled to his remuneration and to rewards adequate for what he has done. If we put the taxes too high we
    1190
    are pro tanto slowing down the whole scheme we have in mind. I do not know what arguments the right hon. Gentleman was given before he made his changes in the Budget. He said the other day that he made them because he though they were fair. "Fair" is a difficult thing to evaluate, because what may seem fair to one person may seem extremely unfair to another. All I would say is that we think it would have been reasonable had he reduced the rate of taxation on these high incomes. It would have brought some alleviation to the people of whom I am speaking. The fact that there are not many of them is not relevant, because it is the business of the State to do the right thing and not to consider numbers. The right hon. Gentleman said there was only 125,000 of them all told. If that is so, there has been a considerable increase during the war, because according to the last prewar figures there were only 89,000. [HON. MEMBERS: "They have done well."] They must all have worked very hard, because owing to the 100 per cent. Excess Profits Tax the opportunities did not exist in this war which we were told existed in the last war, though they may have existed along the lines of getting the perquisites to which I have referred.
    I do, therefore, on behalf of my right hon. Friends and myself ask the right hon. Gentleman to take sound advice on these matters. If he will not take it from me—and I would not expect that—there are economists, there are writers, there are even advisers in his own Department who study these things over a period of years and who will tell him that if you make it impossible for a man to save in his lifetime before long you will entirely dry up the yield of the Death Duties, because there will not have been any, capital appreciations out of which they would be payable. We shall be interested to hear what the right hon. Gentleman has to say in justifying the changes he has made, and I hope, if he is not going to make any alterations by accepting this Amendment, that when Budget time comes again in the Spring he will look again at the whole problem and see whether we are not right in telling him that there is a limit beyond which he cannot safely go in the interests of production, enterprise and the benefit of the nation as a whole by taxing incomes too much.
    Mr. Montague: Would the right hon. Gentleman mind my putting this point? It is to be presumed that a certain amount of money is required by the Chancellor. Is it not reasonable to ask him if he says it is undesirable that certain people should be taxed to provide that money, to tell the Committee where the Chancellor is to get the money from and who should be taxed?
    Captain Crookshank: All I can say is that the Chancellor is getting only £7,000,000 more from Surtax against £325,000,000 of relief, and he admits that he has no idea within £200,000,000 of what his expenditure is likely to be.
    Sir I. Fraser: I do not doubt that this Debate will offer hon. Gentlemen opposite ample opportunity for saying in their constituencies: "Here are the Tories, true to type, looking after their own." I do not doubt that that evokes an echo opposite, and is to be noticed, but may I put to the Chancellor of the Exchequer and the Committee a point which I venture to think is in the national interest, and not in the interest of any class? The point is that this is a country in which any man, if he has the ability, and if he is able and willing to work hard, can get into the position where he can earn a good salary. [HON. MEMBERS: "No, no.") There are countless examples which show that this is true. On the other side of the House are many men who, within a few months from this day, were in the ranks of our gallant Forces, or young officers, who had no prospects whatever comparable with those which now lie before them. How have they won this? By their ability; by their hard work; by taking a chance.
    If it is good for them, is it not good for others? On the Front Bench opposite are men whom we admire—I admire very much the men on that Front Bench, or men in any front place who have come from very difficult beginnings, with very limited education and have worked from a very early age in pit, factory, or on the land. The fact remains that they have gone from those difficult beginnings up to the highest places in the land. In the trade union movement you have men starting under difficult circumstances, without well-to-do fathers to sustain them, who find their way into the front ranks. You have others who go up on the mana-
    1192
    gerial side, who become foremen and managers, and, eventually, directors with good salaries. If we are entering into an era of the Socialist State in which some of the prizes due to private initiative, and to the building up of small businesses under private ownership, are to be taken away, it is all the more important for those who have the ability and the capacity to work hard that there should still be prizes in the ranks of management. If you take away from management all incentive, I will not say to make a fortune, but a good place for themselves and their family, and to give their children a good chance, you will be taking away one of the most vital springs in our economy. Until you can replace this by some ideal of service to the State, which is notably present on the benches opposite, but which has not yet permeated to the whole of our people, of making money, of getting on in the world, and doing the best you can for your family and providing for your old age you have to admit that it is one of the vital springs which leads to enterprise and initiative.
    If we are to get our country out of the difficulties of the present time and tackle the export trade and make our country rich once again; if we are to save ourselves from starvation in the next year or two, we have to make use of all the enterprise of which our people are capable. We have to give encouragement to investors to invest and get a fair return on their capital—and that includes a high profit upon risky investments—and if they do not risk money, there will not be the capital coming forward to promote good and new enterprises. There is in the sphere of management the vast project of the better training of young people which my right hon. Friend the Member for Saffron Walden (Mr. Butler) introduced in the last Government. There are all these opportunities to improve or to put their abilities to better use, and if, at the end of it, they are not able to make and to save some money, one of two things may happen. They may seek their fortune in the United States or in our Dominions and leave us without the leadership and the brains that we need for our living, or, alternatively, they may become academic and say, "I can jog along. I can do moderately well by working moderately hard. Why should I put in that extra bit of effort which is going to lead to my promotion

    1193
    and another £200 or £300 a year on my salary, of which the Chancellor takes Three-quarters or a half, or even nine-tenths?" You are going to dry up the springs of enterprise and industry and thereby do harm to the masses of our people. My argument is not based upon the view that the selected 130,000 Surtax payers should have more in their pockets for their own benefit. It is based on the view that if you do not make it possible for the able men, who represent a very small percentage of our people, to get the same training, the best training in the world, there will remain the fact that men with drive, foresight and the power of leadership will be penalised. If you deny them the opportunity of making good money and of putting some by for their old age and for their families, you are depriving our country of one of its greatest opportunities for revival.
    9.15 p.m.
    There is another aspect of this matter, and that is the argument that was made by the interrupter. [An HON. MEMBER: "It was the hon. Member for West Fife (Mr. Gallacher)."] No, it was one who stands a little lower down physically in the House, but is less loquacious. The hon. Member interrupted me to ask, "Where are you going to get the money from if you don't take it from those people?" Where does money come from? Hon. Members opposite know where money comes from. It comes from some bottomless purse belonging to the State, whatever that may be. All you have to do is to dip into it and, like the widow's cruse, there is always more there. Hon. Members opposite may find that kind of thing brings them votes at elections, hut it will not enable them to bring our country back to prosperity.
    Where does the money come from? Money, as a token either of available wealth or accumulated wealth, all comes out of the work of the workers. [HON. MEMBERS: "Hear, hear."] I knew that that statement would evoke a cheer. It is one of the oldest flies that we Tories throw to our political audiences. Money all comes out of the work of the workers. Who are the workers? Are they exclusively the hon. Gentlemen sitting opposite? Are they exclusively the people who work with their hands? The members of the Labour Party are anxious to establish themselves now as a moderate bour-
    1194
    geois party, appealing to the middle classes, because without the support of middle and lower middle class votes, they can never hope to retain power in this country. Even the Labour Party are adding the word "brain" to "hand." [Interruption.] An hon. Member says "Some of them." I believe, all. In the Labour Party Manifesto we find it suggested that all who work by hand and brain are workers. Is the worker worthy of his hire? Is the craft worker worthy of being paid more than the ordinary labourer, or is 'he not? At any rate, the National Union of Railwaymen and the Mineworkers' Union and even the professional Football Players' Union take the view that their workers are worth more money, and should have more money, than the ordinary labourers in the general unions—and of course all members of unions are worth more than those who are not members of unions.
    If this be so, we have established two principles. One is that some people work by hand and brain, or hand or brain, and the other is that there are different values to be set upon the work, one value for craft union workers, for the trade unionist, and one for the other fellow. Possibly even Members of Parliament are worth a little bit more than they are paid. Who are the most important? En masse those unskilled men, the patient masses of the working class, are the most important. They are the least well-paid, according to their trade union standards.
    Mr. Callaghan: On a point of Order, Mr. Douglas. May I ask what all this has to do with the Amendment?
    The Temporary Chairman (Mr. Douglas): The Debate has ranged lather wide. It would be better if the discussion was confined more closely to the Amendment.
    Sir I. Fraser:I was endeavouring to present an argument strictly in line with the terms of the Amendment which has been moved. The point I am making is that it is to the interests of the masses of our people that those rare, relatively few people, from whatever class they come—and I hope, in fact I know, they will come in increasing numbers from our primary and secondary schools—should have the opportunity, as they grow up into middle age, of making some money

    1195
    and of reaching a standard of life which gives them leisure and enables their brains to fructify in work.
    Hon. Members may like it or not, but it is a fact that the hardest work in the world is the work that calls for decision. The brainwork which wears men out and uses up their vital force is the work which calls for decision, and it is also the rarest gift—this gift of decision—so rare that we find only 2 or 3 per cent. of mankind possessed of the gift of immediate decision. Any nation which fails to give due regard to the value and importance of these gifts, which does not encourage these people to come forward and take chances and get on with their work, even to work 10 or 12 hours a day, if need be, because they want promotion or in order to save a bit of money—any nation which neglects this neglects one of the quickest ways to give the masses of the people a better standard of living. I hope very much that the Chancellor of the Exchequer, who himself had the advantage of—well, I would hardly say a good education, but, at any rate a very expensive one—will, at least, see the force of the argument and give us this Amendment for which we are asking.
    Mr. Callaghan: It is a pleasure to se the benches opposite so full tonight. This is the sort of occasion on which we expect the serried ranks to appear. Even though the speeches which hon. Members make are not particularly relevant to the Amendment we are discussing, it is still nice to see them there. We can now get on to the discussion of what the Amendment is really about—to alter the rates of Surtax payments, and it is to that that I would like to draw the attention of the Committee. On the Second Reading of the Bill, the right hon. and gallant Member for Bristol West (Colonel Stanley), in reference to this matter of Surtax, said that what, in fact, the Chancellor had said was, and I quote him roughly, that whatever the finances of this country, whatever their improvement, and whatever the Budget surplus available, in no circumstances was any of it to be devoted to the reduction of taxation for the higher scales of income. I see that the right hon. and gallant Gentleman nods his head. I am sorry he still thinks so, because the figures show completely that he is wrong. There has
    1196
    been considerable relief given to these people in the higher ranges of the Income tax and Surtax field.
    I am sorry that the right hon. and gallant Gentleman the Member for Gains-borough (Captain Crookshank) is not still here, because he repeated what the right hon. and gallant Member for West Bristol, said, that what the Chancellor gave with one hand he took away with the other. I would ask them to be more precise, and to say at what point in the salary scales in the Surtax levels this holds true. It is not a debating challenge; I do want to know. I have been through these Tables very carefully and I can find no point at which the statement of the right hon. and gallant Gentleman can be justified. Indeed, I would go further and say this—and this from a Socialist bench is not perhaps a particularly good thing to say—that the gap between the lower salaries and the higher salaries has been increased as a result of this Budget; that those who are at the top end of the scale are, in fact, going to be further ahead than those at the bottom end of the scale.
    I will take a couple of illustrations but, unlike the right hon. Gentleman the Member for the City of London (Mr. Assheton), I do not have to pick about, I can take them from anywhere in the Tables. Let me take the man with £300 a year and' the man with £3,000 a year—the man at the bottom and the man at the top. The difference in their net salaries—their "take home pay" as the Americans like to call it—has been increased by £67 in this Budget; in other words, the Surtax payer has gone £67 further ahead than the man getting £300 a year. Or take £400 and £4,000 a year. There the difference in the "take home pay" as a result of this Budget gives the Surtax payer an additional £110. That is my reading of these Tables; I am open to be corrected if I am wrong, but I am pretty certain I am not wrong. The plain truth is that when the right hon. and gallant Member for West Bristol says in a flight of rhetoric that no improvements at all are given to the Surtax payer, he has not, in fact, studied the Tables as completely as he might have done.
    I come now to the next point, and that is what the right hon. and gallant Member for Gainsborough was talking about

    1197
    in relation to gambling, evasion, perquisites. I do not know whether his friends like to be described in that way; perhaps they do, perhaps that is the mentality and the outlook of people getting more than £2,000 a year. We on this side would not know a great deal about that.
    Mr. Walter Fletcher: May I draw the attention of the hon. Gentleman to the salaries of Ministers, which are about £2,000?
    Mr. Callaghan: That is a fair debating point to make, but it does not make much difference to what I am saying now. I would prefer, and I am sure the hon. Gentleman who has just interrupted me would prefer, a description of the over £2,000 a year given by the right hon. Member for the Scottish Universities (Sir John Anderson), who said:
    "I would say this—I throw it out for consideration—that economic inequality, from a national point of view, is not an evil thing but is positively good … why weaken or destroy that incentive? "
    And here comes the bouquet to hon. Gentlemen opposite—
    "Why weaken and destroy the incentive of the small number of men, exceptional individuals, whose services to the nation may far transcend that of battalions of ordinary men? To be deprived of the services of such exceptional men—we all know some of them—might be an immeasurable loss to the community. Some very exceptional ones might go on struggling and striving, even if all reward were denied them, but we have to take account of the world in which we live, and that is certainly not the common experience.''—[OFFICIAL REPORT, 24th October, 1945, Vol.414, c. 2022 and 2023.]
    It was with that in mind that I read the Amendment which appears on the Order Paper in relation to Surtax. It referred me back to the second Finance Act of 1940, so I turned it up to see what it was that right hon. and hon. Gentlemen apposite want to do to encourage this spirit of enterprise, to encourage this initiative, to make us all go forward, to reward these exceptional men. Let us see what it is they want to do. Let us take some specimen figures. The minimum on which their relief can be applied is £3,000 a year. The incentive which they want to offer under their Amendment—and they want us to take it seriously—to the marl getting £3,000 a year is £6 10s.
    1198
    9.30 p.m.
    Let us take the £4,000 a year man. Here you get the real giants of industry; the people who take decisions; the men who matter. These are the people who have to be encouraged; the chaps who have to have everything put in their way. What is it that this Amendment, which stands in the name of the right hon. Gentleman, wants to give to them?—£31 a year, another 10s. a week, and that is going to do everything. I hesitate to spend more time on this, because I do not think the Amendment is really worth it. Why is it that dogs which always bark do not bite? Why do not they put down an Amendment that would really mean something, if they feel so strongly about it as all they are saying tonight really indicates, instead of putting down this pettifogging nonsense? If that is unparliamentary I withdraw it. When hon. Gentlemen opposite ask the Committee to take them seriously by suggesting that the man whose "take-home" pay is £41os. 5d. is deprived of all initiative and all risks and all willingness to venture unless it is put up to 7s. 8d., then I suggest there is only one thing to do, and that it is to throw up the Amendment. It is not a genuine Amendment. The right hon. and hon. Gentlemen opposite accused the Chancellor of the Exchequer of "playing to the gallery" in what he was doing. They are playing the fool, and they are also window-dressing.
    Colonel Erroll: I have already been fortunate enough to address this Committee twice today on non-controversial matters, and I feel now that it may be my fate to be laughed at for the first time by the opposite side. However, it has been said that that is an honour. The point I wish to make is that our Amendment suggests not that Surtax should be reduced but merely that it should be kept where it is. We feel it is particularly unfortunate that Surtax alone should be increased at the present time. Nothing has been said, either today or in the earlier stages of the Finance Bill, to suggest that we are now embarking on a period of particular financial stringency. Nevertheless, one class of individual, and one alone, is singled out for an increase in taxation, and that is the Surtax payer. [HON. MEMBERS: "No."] He is the one class, and I suggest that this

    1199
    savours strongly of what I can describe as a vendetta legislation.
    We on this side of the Committee are not asking for the removal of Surtax, but are asking that the present absurdly high rates should be kept where they are, and not increased. I have listened with great pleasure and amazement to the jeers from the other side on the subject of enterprise, and I have been pondering during the past few days over the Government's decision to go in for the supply of building materials in a big way, because it seems to me that hon. Gentlemen on the other side of the Committee are so enamoured of this idea of enterprise and speculative adventure that they are determined to go into it, and are going to do it, very wisely, with somebody else's money. I suggest that the amount of money which would come from the increased Surtax— which is only £7,000,000—could far better be found by reducing from £100,000,000 to £93,000,000 the amount which it is proposed to give the Minister of Health and the Minister of Works. Let them be a little less speculative about a very hazardous undertaking.
    9.30 p.m.
    There is one class which an increase in Surtax will hit extremely hard, that is, the novelists and actors and actresses. They represent a very small number of people. Their votes will certainly not make much difference to the composition of this Parliament or any other, but they deserve to be considered. They make a large amount of money for two or three years perhaps, and then seldom have another opportunity of making large sums. Particularly is that the case with actors and actresses. They are brought into prominence by public fashion and public whim, and as quickly thrown overboard. They make large sums for perhaps two or three years, and then have nothing more to which to look forward. A large proportion of such money is now taken away in the form of Surtax. Under this Bill more is to be taken away. The case is even more serious in respect to the novelist. He may work for two or three years on a novel. He is paid for it in one year, and his product of three years' work is charged at high Surtax rates, whereas if he could be paid in instalments, as he writes, chapter by chapter, he might not pay Surtax at all. There was
    1200
    a case in the newspapers only the other day of a well-known actor whose name I will not mention here. He said he was not prepared to undertake any further work at the present time because he was only going to get 6d. in the £ for doing it. It may be said that that is not particularly charitable or artistic, but the fact is that great artists, like lesser artists, work for money.
    Mr. Evelyn Walkden: He could work for E.N.S.A. for only £10 a week.
    Colonel Erroll: He had worked for E.N.S.A.
    Mr. Walkden: He could entertain the troops.
    Colonel Erroll: That particular artist had already done his quota with E.N.S.A.
    Mr. Walkden: Six weeks—leaving 46 free.
    Colonel Erroll: Then there is the case of surgeons and others, who reach the peak of their abilities for only a few years, and work at very high pressure, under considerable nervous strain. They are entitled to the relaxation which their position should give them. They are entitled to be able to get away from the towns and hospitals in a good motor car to a country cottage for the weekend—
    Mrs. Braddock: What about the old age pensioners?
    Colonel Erroll: I quite agree—when the old age pensioners have done as much for the rest of humanity as some surgeons. In any case I am sorry that the hon. Lady did not consider it more important to put up old age pensioners' salaries, before voting for putting up her own salary.
    Miss Bacon: What sort of salary?
    Colonel Erroll: The Parliamentary salary. This increase in tax discriminates against the best brains and talents we have. It is but further proof that the Socialists offer nothing to the enterprising. It is another step in reducing us all to mediocrity.
    Mr. Malcolm MacMillan: I can only say, summing up the last speech, that the last state of the Debate on the other side of the Committee is certainly much worse than its first. I

    1201
    would like to address one or two remarks of commiseration to the right hon. and gallant Member for Gainsborough (Capt. Crookshank). We were touched by the fervour of his characteristic solicitude for the poor—the poor in spirit, at all events—round about him. It was touching in the extreme to hear his fellow feeling for the under dog, or perhaps it was a fellow feeling for his pocket book; I almost expected to hear him mention hardship committees to deal with the case he gave us of those who were suffering with over £5,000 a year. The remarks he addressed to this side of the Committee on tax dodging and evasion might have been addressed more appropriately to other hon. Members. He attacked rather bitterly—
    Mr. Jennings: Did he not address his remarks to the Chancellor? He was not accusing the other side.
    Mr. MacMillan: I would hesitate to say he was addressing the suggestion to the Chancellor as a taxpayer. He might have specialised his criticism and addressed his remarks to his own supporters who are, in a greater proportion, enjoying larger incomes than Members on this side. I might answer one of his points by referring to the Noble Lord who sits for South Dorset (Viscount Hinchingbrooke) who referred to gambling and betting.
    Viscount Hinchingbrooke: Not me. It was the right hon. and gallant Member for Gainsborough (Capt. Crookshank).
    Mr. MacMillan: If you discourage savings and thrift, which have been so much eulogised on that side of the Committee, one of the channels into which the money, which might well have been saved, might go is the anti-social one of gambling and betting. He should have addressed his remarks to the Noble Lord on that point. Does the right hon. and gallant Member for Gainsborough state that £5,000 should be the top level income? He said it was sufficient for a man in a responsible position using his brains full time. I do not know whether he meant it was a necessary minimum for a man using his brains full time in a responsible job. I can only suggest if he did, that he has not been using his brains full time since he left the job of Postmaster General in the late Government. There is one solution. They can still be patriotic and refuse to accept anything
    1202
    more than the £5,000 if they wish to do so and then allow themselves to pay tax on that. The right hon. and gallant Gentleman's appeal was touching, and we commend his consideration for the poor taxpayers. Yet they responded to our election appeal and not to his. Perhaps if he had distinguished himself in the past by taking the side of the genuine bottom dog as he adopted it on this point tonight, he might have had more success, and not be on that side of the Committee criticising a Measure proposed from this side.
    9.45 p.m.
    Sir Frank Sanderson: In rising to support the Amendment, I find it very difficult to arrive at a conclusion as to whether the increase of Surtax is being imposed in order to raise revenue or whether it is being imposed as a political expedient. I find it very difficult to appreciate how it can, in fact, increase the revenue for my right hon. Friend. Looking at the revenue which the Surtax has brought during the past years, one sees that as the rate of Surtax has been increased the amount it has produced shows a lower return for the Chancellor. The revenue derived from the Surtax in the year prior to the war, in 1939–40,it will be seen was £79,000,000. At that time the rate of Surtax was comparatively reasonable. When, however, during the war the Surtax was increased to 9s. 6d. in the £, giving a total Surtax and Income Tax at the high level of 19s. 6d. in £, one finds that the amount derived from Surtax shows a declining figure namely £76,000,000 for the year 1940–41 as compared with £79,000,000 before the outbreak of the war. The following year, 1941–42, Surtax revenue decreased still further to £74,000,000.
    That was followed by a further reduction in the following year, and for the year ending 5th April last, Surtax brought in some £6,000,000 less than the figure for which the Chancellor of the Exchequer budgeted. The figure was £73,500,000 which is the lowest amount of Revenue received from Surtax since the beginning of the war. These figures demonstrate that the incidence of excessive high direct taxation has reached saturation point, and that in fact it has not increased but has reduced the revenue. I think I have cause to ask the Chancellor of the Exchequer whether he has increased the Sur-

    1203
    tax charge for political expediency or for the purpose of raising revenue? With regard to the £7,000,000 he hopes to raise with his increase in the Surtax rate I think he will be as disappointed as his predecessor. I would likewise bring the House to a realisation of what the £7,000,000 really means. This amount is equivalent to about 1d. in the £on Income Tax. Surely the right hon. Gentleman does not suggest that he intends this as a means of Revenue raising? Would it not be better for him to take the Committee into his confidence and to tell hon. Members what would appear obvious, that he imposed the tax purely as a political expedient.
    I would like to make one point to hon. Members opposite who talk about the larger incomes which are enjoyed in this country today. The result of taxation during the war has been this that the number of those with incomes between £250 and £500 a year after tax, have risen from 1,820,000 in 1938–39 to 5,300,000 in 1942–43. I do not expect there are any hon. Members in the Committee who take exception to that great increase in the number of those who enjoy incomes between those two, figures, but let us look at the other end of the scale. If one looks at the incomes of those with £6,000 a year nett and over for the year 1938–39 one finds the number was 7,000, which number was reduced to under 80 in 1942–43. This small minority have the right to consideration equally with those 5,300,000 to whom I have just referred.
    The final point which I wish to make is this. The other day when the right hon. Gentleman the Prime Minister was in America he made what I thought was a very brilliant speech during which he referred to that country as the greatest country standing for freedom and democracy on the earth's surface. I think we all agree. [Interruption.] It is that democracy and freedom which they enjoy which has enabled them, along with their Allies, to win the greatest war in history. The right hon. Gentleman the Chancellor of the Exchequer was right when he said in his Budget speech that Income Tax has pressed hardly upon people with small incomes; that it has depressed morale, reduced incentive and has in the aggregate diminished production; that it is undesirable in relation to its effect upon
    1204
    productive activity and that it was necessary to increase the allowances to Income Tax payers in the lower ranges of income in order to give them cause for working hard. He said the people required an incentive, but further on in his speech, when he came to deal with Surtax payers, I anticipated a reduction in the rate. Yet instead of reducing Surtax, he increased it. The right hon. Gentleman thinks that hon. Members behind him require some reasonable incentive, but when he deals with those who have built up the great industries of this country—[Interruption]—as hon. Members know full well, most of the great industries in this country have been built up from the smallest beginnings—is it his deliberate policy to destroy and to kill the romance, initiative and enterprise in industry? If so, I ask him to say so frankly. Is he doing it in order that 'the industries of this country shall be nationalised and or controlled by the Government? If so, will the right hon. Gentleman tell us so?
    Mr. James Hudson: The hon. Member for East Ealing (Sir F. Sanderson) shares with me the privilege of representing the borough of Ealing, and I am very glad of this opportunity to say a few words about the contentions that have been urged by the hon. Gentleman and the Tory Party in support of this Amendment. The case they have made is that the whole of individual enterprise and initiative and the power of industrial recuperation in this country will be imperilled by a high rate of taxation imposed through Surtax, and yet they have failed entirely, although their attention has been drawn to the matter, to give any reason why the number of Surtax payers, during a period when Surtax has been high, has increased from about 80,000 to over 100,000. Despite all that has been said about perquisites, about the desire to have a motor car as part of salary, and all the other things that have been so inconsequentially raised tonight, there remains the fact that in a period of high Surtax the number of Surtax payers has increased. In my judgment that in itself is a public scandal. Hon. Members opposite delight in the thought that when, during war time, everybody was assured that while men were giving their lives there should be no increase of private wealth, and indeed the statement was made that

    1205
    wealth was conscripted by our tax system—
    10.0 p.m.
    Sir F. Sanderson: I was referring to post-war taxation. The taxation we are considering does not commence until 5th April, 1946, and is for the year ending April, 1947. No one takes any exception to the incidence of high taxation during the war.
    Mr. Hudson: The hon. Member thinks that may be the case, but I am still of the opinion that a war which, from every point of view, should have prevented the acquisition of great sums did not prevent it. In spite of all that has been said about the Surtax, there has been an increase of wealth in the wrong hands. I, therefore, ask myself what really is at the bottom of this Amendment. I have noticed on two or three occasions recently that when financial questions have been discussed hon. Members opposite, and particularly right hon. Members on the front benches, have laid great emphasis on Cabinet Ministers and their motor cars. They have spoken in terms of apology as if they realised that they were really cutting rather low down from the point of view of argument. Hon. Members on those Benches know as well as we do, that the growth of the Cabinet Minister's duties and the necessity to get about quickly from place to place require a motor car in his case, as much as in that of any other individual in the community.
    There is no question then of any issue of perquisites in the way suggested when question of the Cabinet Minister's motor car was raised. In fact, I would suggest that what is happening tonight is just a little reminiscent effort on the part of the Tory Party—an effort to continue the controversy that Mr. Neville Chamberlain started in the days of Mr. Ramsay MacDonald when, again, it was a question of the motor car used by a Cabinet Minister, and when they fought an election or tried to fight it, on the issue of the Prime Minister's car. I submit that the effort to discredit the Government Front Bench is discounted by the fact that it is only being made now, in the time of a Labour Government, when it could have been made just as easily during the last Parliament when there were Conservative Ministers enjoying the same privilege. I protest against
    1206
    These occasions being used for the old, worn-out and disreputable controversy upon and disreputable controversy upon which the Conservative Party thrived a few years ago. It might have been a good thing in those days to have turned our backs on it.
    Mr. Jennings: I would like to ask the hon. Member whether he has not been listening to the same arguments that we had to listen to in the last Parliament, when attempts were made to discredit our Front Bench.
    Colonel Ropner: I suggest to right hon. and hon. Gentlemen opposite that the matter under discussion should receive their careful consideration. All I can say to the hon. Gentleman who has just sat down is that he has either misunderstood or is intentionally misrepresenting the argument used by the right hon. Gentleman the Member for Gainsborough (Captain Crookshanks).
    I have always regretted that Surtax and Income Tax are not amalgamated and made into one tax. I must confess that I know too little about the intricacies of the Exchequer to appreciate why Surtax and Income Tax cannot be one. I am quite sure that the majority of the electorate throughout the length and breadth of this country, when discussing Income Tax, forget that there is such a thing as Surtax and that when their attention is drawn to Surtax and the amount paid by Surtax payers, they forgot that these same Surtax payers are paying Income Tax.
    There has already been reference made to the words of the Chancellor of the Exchequer when he spoke with regard to the deterrent effect of Income Tax and I would remind the Committee of what the Chancellor said on that occasion. In discussing Income Tax he said:
    "There is plenty of evidence to show that it has depressed morale, reduced incentive and has, in the aggregate, diminished production. To this extent it has been a bad tax which must be judged in the field I am now speaking of as on balance undesirable in relation to its effect upon productive activity.''—[OFFICIAL REPORT, 23rd October, 1945; Vol. 414, c. 1892.]
    I quite agree with the Chancellor of the Exchequer. It is true that Income Tax at a level of 10 shillings in the pound discouraged enterprise among those men and women whose level of income just brought them into Income Tax payment. When they had reached a certain standard, they either knocked off for the day

    1207
    or took a day off, or, if on piece rates, they adjusted their work so that their income did not come within the Income Tax limit. It is true that Income Tax at that level discouraged enterprise.
    If it was natural for a 10 shilling Income Tax to discourage work and enterprise, why do hon. Members opposite think that a combined Income Tax and Surtax ranging up to 18s. 9d. should not have the same effect on what are the wealthy sections -of this community? I cannot follow their line of reasoning, or argument, or the jocular fashion in which a suggestion from these Benches was treated that penal taxation of 19s. in the pound should not discourage enterprise, when the Chancellor of the Exchequer, with their agreement, appreciates the fact that 10 shillings in the pound Income Tax does discourage it.
    There is a great deal of bunkum and humbug spoken with regard to the motives which incite men to work. I know of the unselfish toil given by many people to their country not only in days of war, but in days of peace. I am not by any means alleging that there are no unselfish motives which cause people to work. But we should appreciate on both sides of the House, that the vast majority of the workers of this country work for themselves and for their own. It is equally true, whether we are talking in terms of wages, salaries or of profits. I have never attempted to disguise the fact that men work for themselves and their own. I believe that to be a high motive. I do not think that it is anything to be ashamed of for a man to work for his wife or children, or, for that matter, his grandchildren and his great grandchildren. I believe it to be equally laudable in the case of wages, salaries and profits. Therefore, it is altogether wrong for hon. Gentlemen opposite to think that there is something shameful for a Surtax payer to case up on his work when 18s. 9d. is taken away from him.
    The President of the Board of Trade has recently been lecturing various trades and industries—lecturing and threatening; and I do not think that I am wrong when I say, frankly, making himself look rather foolish in the process. What is the good of the President of the Board of Trade attempting, by one means or another, to encourage industrial leaders to
    1208
    increase production and to have care for the export trade and so on, when, at the same time, the Chancellor of the Exchequer is taking away the incentive to do so. We probably all know of cases that are happening today where men are refusing to return to the city or to the jobs they left when they went and fought for their country, or from which for one reason or another they have been parted during the last six years. It simply is not worth their while to sweat and toil and worry, with great responsibilities in the city.
    Mr. Messer: Will the hon. and gallant Member say who are those that sweat?
    10.15 p.m.
    Colonel Ropner: The work that wears a man out is undertaken by the leaders of industry; by the men who work 16 hours a day with all the worry and not by those who work only eight hours, with no responsibility. The men who are earning large incomes to-day have fought their way to their position through sheer ability. I do not stop, as other hon. Members have done, at incomes of £5,000 a year. I am ready to base my argument on incomes considerably larger, £6,000, £7,000, or £10,000, such as is earned by the Solicitor-General. A previous speaker told the Committee that these men are 1 or 2 per cent. of the population. They are nothing of the sort. They are one or two in 10,000. Those are the men who believe in encouraging our industries—or who should believe in it and who did so in the past and built this country into a great industrial nation. [Interruption.]
    The Chairman (Major Milner): I must ask hon. Gentlemen to refrain from interrupting.
    Colonel Ropner: The men who earn very considerable incomes are very few and they deserve the reward which they receive. The rate of taxation levied on those men should not be at the penal level which it is today, or at least if it is necessary that it should remain so today, hon. Gentlemen opposite are wrong in taking a delight that that should be so.
    I would like to draw attention to another argument used by the Chancellor of the Exchequer. He said that one of our great achievements on the home front during the war was that by a series

    1209
    of war Budgets there had been a notable advance towards economic and social equality. Everybody, he said, had recognised that in wartime this was right, and if it was right in wartime it was not wrong in peace; a dangerous argument. The right hon. Gentleman was not Chancellor of the Exchequer in wartime. If it was right that he should occupy a less important position in wartime perhaps it is wrong that he should be occupying the position that he occupies in peacetime. Does the right hon. Gentleman really believe it is right to have economic equality? I believe there really are some hon. Members opposite who would answer "Yes" to that question.—[HON. MEMBERS: "Yes.''] To my mind it is a tragedy. There never will be economic equality, and it is altogether wrong that that should be the aim of any Chancellor of the Exchequer, or even of the lesser men who sit behind him. If they ever did achieve economic equality they would ruin the country in the process. The equality which they would achieve would be of an order far lower than has ever been suffered in this country, even amongst the poorest members of our society. You might get a sort of drab reflection of the appalling, dull and poor uniformity which we should find if we went to a country which was one of our great Allies during the war. I would suggest to the right hon. Gentleman that he would be doing the best, not only for the wealthy of whom we are primarily thinking this evening— [HON. MEMBERS: "Oh''.] —by "primarily thinking" I mean that the Amendment which we are discussing deals with them —but for all sections of the community if he accepts the Amendment. We in this Committee are drawn from all walks of life and are of all shades of opinion and our approach to all questions must be guided by our views as to which is best for our people. It is a perfectly genuine and quite sincere submission for the consideration of the Committee that we will best serve the interests of most people in this country if the men who could lead our industry are encouraged to do so and are rewarded according to their ability. That is a perfectly sincere conclusion to submit for consideration in the deliberations of this Committee.
    I have said nearly all I wanted to say. [HON. MEMBERS: "Hear, hear".]—
    1210
    Well, I will add this, and I did not mean to. I think that the most tragic moment which I have experienced in this House of Commons in the whole of my service here, was when the Chancellor of the Exchequer announced that there was going to be a reduction in Income Tax, and there was a commendable cheer from the benches opposite, as there was from these benches—but when he announced that he was going to add to the Surtax, there was a much louder cheer than there was when he announced that he was reducing the burden of Income Tax. If that is really the spirit in which this House of Commons is going to tackle these grave economic problems of today, I am not optimistic for the future of this country under the present Government.
    Mr. Dalton: This Debate has touched deeper chords of emotion than any of those which have preceded it today, not excluding that regarding wireless receivers for the blind. It would be supposed, listening to a number of the speeches, that the effect of this Finance Bill was to increase the taxes on rich people. It is nothing of the kind. Indeed, in the very remarkable speech made by my hon. Friend the Member for South Cardiff (Mr. Callaghan), the effect was made very clear by simple numerical illustrations. None the less, the delusion has persisted in later speeches, and I think it is necessary to bring the Committee back to a sense of simple reality by pointing out as is very clearly done in the White Paper issued with the Budget, that every person, no matter whether above the Surtax level or below it, so long as he is subject to income Tax at all, is going to pay less next year in terms of Income Tax and Surtax than this year. This Finance Bill distributes relief from taxation, but it seems to be a grievance with some hon. Gentlemen opposite that, although something is distributed to all, more is not distributed to the rich. That is the complaint in a phrase, in a nutshell, and, on the whole, I am very much astonished at some statements that have been made.
    The hon., and gallant Member for Barkston Ash (Colonel Ropner) has sat with me through a number of Parliaments. I think he was here in 1931 when I was not, and it may be that I was here when he was not, but I was very shocked to hear him say that he had never been so

    1211
    deeply moved to distress in Parliamentary Debates in this House, and had never thought anything more tragic in the whole of his experience, than when some of my hon. Friends applauded my proposal not only to reduce Income Tax but to increase the Surtax. Well, I thought that was a very curious thing to say, because he and I have sat here and, I believe, taken part in Debates on such matters as the distressed areas, unemployment, bad housing and the miserable poverty which has so long prevailed in large parts of this country.
    Colonel Ropner: The right hon. Gentleman has misrepresented me.
    Mr. Dalton: No.
    Colonel Ropner: Yes, he has. I did not say that I was shocked, or anything else, at a joint cheer as a result of an announcement that there should be a reduction of Income Tax and an addition to Surtax. I did not say that. I said there was a much louder cheer from those who sat behind the right hon. Gentleman when he added to the Surtax than there was when he brought relief to a much larger number of taxpayers in this country.
    Mr. Dalton: I quite understand what caused the hon. and gallant Gentleman this sense of emotion. He has accurately described what caused this sense of tragedy. What I said was that I found it rather odd that, having sat with me and with many others through these Parliamentary Debates on these far more distressing—to most of us—situations, covering much larger numbers of people, that the climax of tragedy was reserved for this occasion. Remarkable things have been said by other hon. Gentlemen. The hon. and gallant Member for Altrincham (Colonel Erroll) made the constructive proposal that we should not increase the Surtax rates, that we should thereby incur less rapidly the expenditure of £7,000,000 a year, and that should be taken out of the provision for housing which the House was discussing yesterday on the proposition of my right hon. Friend the Minister of Works. I prefer that the Surtax payer should pay a bit more and that we should get more houses.
    Mr. Godfrey Nicholson Mr. Godfrey Nicholson rose—
    The Chairman: The hon. Gentleman knows very well that he is not entitled to interrupt when the right hon. Gentleman remains on his feet.
    Mr. Nicholson: The right hon. Gentleman was about to give way, and this is a most crucial point. Is the burden of the right hon. Gentleman's argument that it is lack of another £7,000,000 which prevents another £7,000,000 being given to housing, because that is not the gist of his Budget?
    Mr. Dalton: No, the burden of my argument was a quotation from the hon. Gentleman's gallant Friend sitting behind him. It is possible that the hon. Gentleman was not in the Committee when the hon. and gallant Member for Altrincham spoke. I was saying that the hon. and gallant Member for Altrincham had recommended that we should leave this £7,000,000 in the hands of the Surtax payer, and balance our operations by spending £7,000,000 less on housing. That was his proposal.
    Colonel Erroll: Surely my proposal was that £7,000,000 less might be spent on a highly speculative enterprise.
    Mr. Dalton: Well, the accurate version of all this can be read in the OFFICIAL REPORT of this Debate, and can be given such publicity as is desirable in the public interest. As to speculation, I had thought that one of the other arguments adduced on the other side of the Committee was that speculation was desirable, that it was a form of enterprise that should be encouraged, and that one of the objections to my proposals regarding Surtax would be that the Surtax payers would fall back into such a state of drab lack of enterprise that, possibly, British industry would suffer.
    The hon. and gallant Member for Barkston Ash made a point with which I wish to deal with complete frankness and directness, because it is very desirable that this should be understood so far as the intentions of this Government and of the majority in this House are concerned. He did not like the passage in my Budget speech in which I said:
    "One of our great achievements on the Home Front during the war, with the aid of a series of war Budgets has been a notable advance towards economic and social equality."

    1213
    I went on to say that if that was right in war time, it was not wrong in peace time and I added:
    "We must not give ground now, when the men who won the war are coming home."—[OFFICIAL REPORT; 23rd October, 1945; Vol. 414, c. 1894.]
    It would indeed be a miserable welcome that we should give to our fighting men, but for whom we should not be here at all tonight, if we said, "Now let us return to the old pre-war ways. Pray, let us re-establish all the old arrangements, including that grave state of inequality, that grave state of social injustice, emerging in inequality which disfigured our community before the war."
    10.30 p.m.
    Colonel Ropner: I am sorry to interrupt, but I think the right hon. Gentleman knows that he is again misrepresenting what I said. 1 did not object to the quotation I read out from his speech. He knows perfectly well I did not say I objected to it. I asked a question, and he is not answering it. I asked him if it was his object to attain economic equality by means of Budgets.
    Mr. Dalton: I am going to answer it. I am saying, if I may repeat what I said in my Budget statement, that it would be a miserable welcome to offer these men to say we are going to re-establish the pre-war inequalities in our society, and that that is not a welcome which this Government and this Parliamentary majority seeks to give them.
    Hon. Members: Who suggested that?
    Colonel Ropner: I did not suggest that.
    Mr. Dalton: If hon. Members will allow me to develop this matter, they will get a perfectly straight answer. [HON. MEMBERS: "Do not make allegations."] I am not going to withdraw any allegation because everything I have said is perfectly true. We in this Parliament are going to advance considerably further towards social and economic equality. I hope we are. But that does not mean we shall arrive at a state of complete, flat, uniform equality. Of course it does not. [HON. MEMBERS: "Why not?"] In this community, wealth is most unequally distributed, and not at all according either to merit or to service. There has been great idealisation of the Surtax-paying class, and I will come to them in
    1214
    a moment. In this society of ours, in which there is great inequality, which cannot be justified, we are entitled to say we intend, and our programme we put before the country entitles us, to go a considerable distance in that direction. I would quote in answer to the hon. and gallant Member some words I used—not in the House—and which may have been reported in the Press. I apologise for repeating them, but they give the best answer. They are words by Jeremy Bentham:
    "Perfect equality is a chimera, but what we can do is to reduce inequality, and that we should do."
    I add to that, we shall do a great deal in this direction in this Parliament. But when this Parliament comes to an end, there will still be inequalities in this community; there will still be great differences; but I hope they will be smaller than now, and more justifiable than they are. I hope that is a complete answer to the hon. and gallant Gentleman's question.
    Mr. I. J. Pitman: I think part of this misunderstanding arises out of an apparent contradiction. I believe the Chancellor is right, that there has been during the war—
    Hon. Members: Speech.
    Mr. Dalton: I think the Chairman would suggest to me, that although I am very willing to give way to a question or a brief interjection, I do not think that at this stage I ought to give way to a lengthy observation. I venture to say that there has been considerable idealisation of the Surtax-paying class. A great number of Surtax payers do no work at all. They do not even claim to have any earned income. Her, I can speak on what is revealed in the records of the Inland Revenue Commissioners which were published before the war. I hope we shall have another report of the Inland Revenue Commissioners taking account of the war years before the next Budget, so that the House can see the facts as they are. A large number of Surtax payers; as I say, do no work at all. A large number of them live on incomes derived from investments, much of which has been inherited from parents or grandparents, and they do not make any contribution at all to—
    Mr. E. L. Gandar Dower: I would ask the Chan

    1215
    cellor of the Exchequer if, in this year of grace, the management of property is not a job.
    Mr. Dalton: It depends on what sort of property and what sort of management. But I venture to observe, and I am sure this will not be contradicted by anyone who has studied the facts, that there is a good deal of property which yields its income quite painlessly, and without any effort by its owners. I merely make this point in order that we shall not get our ideas wrong in discussing this Surtax business. Some Surtax payers work very hard; some do not work at all, and there are all sorts of intermediate stages.
    Viscount Hinchingbrooke: The Chancellor of the Exchequer does not discriminate between the good and the bad. He damns them all.
    Mr. Dalton: I am dealing with the Amendment as put down on the Paper, and that does not propose to discriminate. That proposes to let them all off. Now if the Noble Lord had drafted an Amendment designed to differentiate between different classes of Surtax payers, according to the degree of contribution they make to the common good, the Government would have been very glad indeed to look at it sympathetically. He will have a chance next April. Between now and then I hope he will exercise his knowledge of these things in preparing an Amendment of that sort. But in this Amendment we are asked to let them all off, and to let all Surtax payers enjoy the full consequences of the reduction of a shilling in the standard rate, in addition to the increases in allowances which, although they may seem small beer to a Surtax payer, are the same all the way up the scale. The hon. and gallant Member for Barkston Ash quoted another statement which I made about the depression of morale but he did not quote fully what I said. I am not making any complaint, only supplementing his quotation. This is what he did not quote today:
    "The Income Tax has pressed hardly in the last few years upon many people with small incomes, whether small earners or small rentier incomes, many of whom never paid the tax before."
    The hon. and gallant Member left that out. Then I went on to use the words
    1216
    that he quoted, about how it would depress morale and reduce incentive, and then I said:
    "To this extent it has been a bad tax, which must be judged, in the field I am now speaking of.''—[OFFICIAL REPORT, 23rd October,1945; Vol. 414, c. 1892.]
    He quoted these words, but did not quote those which defined the field I was speaking of. It is a bad tax in the field where it falls upon very small incomes, and that is why I have made the proposal for an increase in the allowance, thereby taking two million people out of the field of taxation altogether. I do not think that the Surtax field is a bad field, nor did I say so in my Budget speech. When you get up to the Surtax level there are some who "toil not neither do they spin" but merely draw income from property which is managed by others. On the other hand, there are others who do exert themselves very greatly. They do not do it, in my belief, principally—
    Colonel Ropner: Why cannot the right hon. Gentleman be fair when he is answering me? I would appreciate it if he would answer me in the genuine way. When I was making a quotation from his speech I left nothing out. I read a passage from the speech. I did not begin at the beginning of his Budget statement and I did not finish at the end. I read a perfectly fair passage.
    Mr. Dalton: The hon. and gallant Member need not get disturbed about it. I am not disturbed. In order that the Committee might understand the significance of the bit that the hon. and gallant Member quoted, I read the preceding sentence. I say that in the quotation he made, I was speaking not of the Income Tax generally and not of Income Tax payers in general but of Income Tax as falling upon persons of small means and small incomes. In that sense I meant what I said. In the wider sense I did not mean that at all.
    Colonel Ropner: I also meant what I said. The Chancellor has attempted to misquote what I have said.
    Mr. Dalton: I do not think we need go on with that. The quotation was correct, and mine was correct also. But mine was one sentence longer than the hon. and gallant Gentleman's. I want to turn to the Surtax payers; they are the object of

    1217
    this Amendment, and I want to be perfectly frank about their position. I have said that some of them do not work at all and some of them do work. I do not want to detain the Committee too long. I am anxious to get on with my argument.
    Colonel Gomme-Duncan Colonel Gomme-Duncan (Perth) rose—
    Mr. Dalton: I am anxious to get on with my argument. Hon. Gentlemen must not be so sensitive about this. Some Surtax payers work and some of them do not. Is that denied?
    Colonel Gomme-Duncan:Does the Chancellor realise that if people do not earn the money on which they pay Surtax, they work very hard without pay?
    Mr. Dalton: Some do and some do not. I am surprised at all this controversy. I thought I was making a series of harmless and unprovocative platitudes, but apparently not. I was venturing to call to the attention of the House the fact that the Surtax payers who do not work are drawing large incomes without showing the enterprise of which hon. Members have spoken.
    Sir G. Fox Sir G. Fox rose—
    10.45 p.m.
    Mr. Dalton: On the other hand, those who do work hard do not work only for money. Some of them work out of a sense of public spirit—and do not let the Tory Party deny that—and they would work just as hard whether they had a thousand pounds more or less. Do not let the Tory Party spoil the record by denying that. Some of them work because they like power. They like to control great enterprises. Many of them conduct those enterprises well, and others less well. Some of them work because they like the prospect and possibility of recognition in one form or another. Since I have been a Minister of the Crown, that has been borne in upon me. That is a tremendous stimulating agent in economic activity and it is very good that it is so, because you get a large number of people who are willing to work for public recognition without claiming these astronomical salaries thought to be necessary.
    Why is it thought to be such a shocking thing to collect £7,000,000 extra? The hon. Member for East Ealing (Sir F.
    1218
    Sanderson) said £7,000,000 was nothing. Yet hon. Members also say, Why am I not more economical and why am I not reducing expenditure? "Only a penny on the Income Tax," said the hon. Member. I think it is worth collecting and I think it will help to pay for many of those things we are intending to pay for Supposing I were to accept this Amendment? I am going to ask the Committee to vote against the Amendment, and I hope the hon. Members who have made such passionate speeches are going to have the courage of their convictions and not run away when the Division is called.
    Let me tell the Committee just what would happen if we accepted their Amendment. This is what would happen: Under my proposals, Surtax payers with incomes of £15,000 and upwards—that is where the ceiling is reached in the proposals I have made—are getting as a result of this cruel Budget an addition to their incomes of £352 a year. Many a poor man could live on that without the rest. Three hundred and fifty-two pounds more for every millionaire, £352 as a result of this cruel Budget.—[HON. MEMBERS: "Cheap."] Is it not cruel? What has been the argument? That this is a cruel Budget. What happens under the Amendment? The man with £15,000 would get £746 a year. When you get up to £20,000 a year under my Budget he still gets £352, under this Amendment £996. With £50,000 he gets £352 under my Budget, under this Amendment £2,496. And, finally, with £100,000 a year I suppose there are some who get that—from me he gets £352 more. They are getting equality on a high level. Under this plan, on which we are now, I hope, going to take a vote, he would get £4,996 a year. The Conservative Party wants a scale of relief. I have just been reading it and I think I have gone as far as is reasonable, in giving reliefs, amounting, as I said, to £352 a year extra for everyone in the Surtax scale.
    Colonel Oliver Stanley: We are going to vote in a very few minutes. We certainly have no desire to run away from an Amendment which was put forward from this side of the Committee, and which we sincerely hoped, would have been seriously argued. I confess, strange as it may seem, that I am disappointed in the right hon. Gentleman. We quite realised that with the Amendment coming on at a

    1219
    late hour, and with people anxious to catch trains every effort would be made to avoid a serious argument, to impart prejudice, to ascribe improper motives and to sneer and jeer at the party to which I belong. We knew, of course, what would happen and were prepared to face it, but we did, at least, think that the Chancellor of the Exchequer would deal with the Amendment as a serious matter, not from the point of view of vote-catching, not from the point of view of personal comparisons between one income and another, but from the point of view of the one thing of importance—the effect of this taxation upon production. Of course I know that this argument, coming from these benches, would immediately be suspected by hon. Members opposite. So I would ask him to consider this—interested though they might say it is, selfish, old-fashioned, obscurantist—[An HON. MEMBER: "You certainly know."]—because I am going to ask the right hon. Gentleman to forget our argument tonight and to turn to a Debate which took place in this House last May. I ask him to read a speech by that right hon. Gentleman now one of his colleagues, Lord Pethick-Lawrence. Surely hon. Members opposite will cheer the name of such a good Socialist, so youthful, if not in years, in outlook—[An HON. MEMBER: "What about your leader's age?"]—who has accepted one of the most responsible posts. At any rate he will be accepted as being no partisan, as being of unselfish intentions, without selfish feeling—
    Mr. Gallacher: That is a good build-up to what is coming—
    Colonel Stanley: The right hon. Gentleman, that noble Lord as he is now, put in a great plea for that reduction of this penal taxation on that higher income ranges. He did not do so for any selfish motives, or for the love of the rich; he did it because he claimed that in that way production would be increased, national revenue would be increased and gain resulting from it would not be merely a direct, financial gain to those who made that remission but would affect a very much wider circle, because of the benefit from increased production. That was a serious argument. It is an argument, I agree, on which hon. Members can take a different opinion, but it was the sort of argument which the right hon. Gentleman
    1220
    himself did not attempt to meet, and which no Member on the opposite side has dealt with at all. Instead, we have been put off with these cheap jeers and sneers. The right hon. Gentleman made a great point that, as our Amendment says, we had made no distinction between that portion of the Surtax payers to whom he paid tribute as working hard for their money, and those who lived on interest. [HON. MEMBERS: "No, no."] The Chancellor drew attention to that. The right hon. Gentleman will read his speech in HANSARD tomorrow, to refresh his memory, and he will find he made great play with the point about how we had drawn no distinction between those two sorts of taxpayers; and, indeed, he almost went on to say that had we drawn such a distinction he might have been prepared to consider the Amendment. We shall have another opportunity at another stage of drawing that distinction and seeing whether the right hon. Gentleman's was merely a rhetorical interruption or one that was seriously meant. But I must confess that in failing to draw any distinction between earned and unearned income, we had only been following the example of the right hon. Gentleman through the whole of this Budget. We thought such a distinction was distasteful to him, and that he was more likely to pay attention to an Amendment which did not draw an unpalatable distinction. May I refer to the speech—the remarkable speech—by the hon. Member for South Cardiff (Mr. Callaghan)?
    Hon. Members:What did Lord Pethick-Lawrence say?
    Colonel Stanley: I have it with me and will read it out. He said:
    "Take a very rich man who is paying not only Income Tax but also a substantial slice of his income in Surtax. He may be faced with a proposal to embark his capital in some fairly hazardous enterprise. If he felt sure that if he made a profit he would get it and that if he made a loss he would have to forgo not only a profit but the capital itself, he might still be willing to engage in that hazardous enterprise."
    Very good sense from the right hon. Gentleman's colleague. To go on:
    "But at the present time such a man is faced with this position: If his enterprise fails he loses his capital; if he makes a profit, no insignificant part of every pound of that profit goes in tax. Therefore, very often the rich man will hesitate about embarking on the hazardous enterprise, even though it might be very much to the benefit of the country

    1221
    as a whole that he should undertake it." —[OFFICIAL REPORT, 25th April, 1945, Vol. 410, c. 8512.1]
    Mr. Sydney Silverman: Is it not the fact that Lord Pethick-Lawrence in that passage was not referring to Surtax at all, but to Excess Profits Tax? Will the right hon. and gallant Gentleman withdraw?
    Colonel Stanley: On the contrary, let me remind the Committee that the passage begins,
    "Take a very rich man who is paying not only Income Tax but a substantial slice of his income in Surtax."
    Mr. Silverman: I heard that first sentence at the first reading. I still say that the speech was about the Excess Profits Tax and not about Surtax. I ask the right hon. and gallant Gentleman if that is so.
    11.0 p.m.
    Colonel Stanley:No, it is not. That is not my reading of the speech. I was about to refer in conclusion to the speech of the hon. Gentleman the Member for South Cardiff which the Chancellor referred to as a remarkable speech. I only hope that the result will be that before long, the hon. Member will be placed by the right hon. Gentleman among the ranks of the Surtax payers. I apologise to the
    hon. Gentleman. His complaint against as was that he was unable to support us because we had, by this Amendment, made the relief of the Surtax payer too small. He pointed out that in some cases it was only £30, £40 or £50. We will try on the Report stage, perhaps in consultation with him, to see if we cannot devise an Amendment which will give relief more in accordance with what he thinks is a necessary and right incentive. I hope we shall get his support.
    Finally, the Chancellor of the Exchequer made great play about equality, although he did not approach to that final aim of equality which did receive a few scattered cheers from his supporters. What we hope is that, when this process of complete equalisation takes place during the next few years, as it has been taking place for years past, it will be an equalisation up, and not an equalisation down. It is easy enough for any Government, for any party, any Chancellor of the Exchequer, to equalise down; it will require statesmanship to equalise up.
    Question put, "That the words pro-posed to be left out stand part of the Clause."
    The Committee divided: Ayes, 275; Noes, 116.

    Division No. 29.]

    AYES.

    [11.4 p.m.

    Adams, Capt. H. R. (Balham)

    Burden, T. W.

    Driberg, T. E. N.

    Adams, W. T. (Hammersmith, South)

    Burke, W. A.

    Dugdale, J. (W. Bromwich)

    Allen, A. C. (Bosworth)

    Callaghan, James

    Dumpleton, C. W.

    Allen, Scholefield (Crewe)

    Champion, A. J.

    Durbin, E. F. M.

    Alpass, J. H.

    Chater, D.

    Dye, S.

    Anderson, A. (Motherwell)

    Chetwynd, Capt. G. R.

    Ede, Rt. Hon J. C.

    Anderson, F. (Whitehaven)

    Clitherow, R.

    Edwards, John (Blackburn)

    Attewell, H. C.

    Cluse, W. S.

    Edwards, N. (Caerphilly)

    Awbery, S. S.

    Cobb, F. A.

    Edwards, W. J. (Whitechapel)

    Ayles, W. H.

    Cocks, F. S.

    Evans, E. (Lowestoft)

    Ayrton Gould, Mrs. B.

    Coldrick, W.

    Evans, S. N. (Wednesbury)

    Bacon, Miss A.

    Collick, P.

    Ewart, R.

    Baird, Capt. J.

    Collindridge, F.

    Fairhurst, F.

    Balfour, A.

    Collins, V. J.

    Farthing, W. J.

    Barstow, P. G.

    Colman, Miss G. M.

    Fletcher, E. G. M. (Islington, E.)

    Barton, C.

    Cook, T. F.

    Foot, M. M.

    Belcher, J. W.

    Corbel, Mrs. F. K. (Camb'well, N.W.)

    Forman, J. C.

    Benson, G.

    Corlett, Dr. J.

    Foster, W. (Wigan)

    Berry, H.

    Crawley, Flt.-Lieut. A.

    Fraser, T. (Hamilton)

    Beswick, Flt.-Lieut. F.

    Crossman, R. H. S.

    Freeman, Maj. J. (Watford)

    Binns, J.

    Daggar, G.

    Freeman, P, (Newport)

    Blackburn, A. R.

    Daines, P.

    Gaitskell, H. T. N.

    Blenkinsop, Capt. A.

    Dalton, Rt. Hon. H.

    Gallacher, W.

    Blylon, W. R.

    Davies, Edward (Burslem)

    Ganley, Mrs. C. S.

    Bottomley, A. G.

    Davies, Clement (Montgomery)

    George, Lady M. Lloyd (Anglesey)

    Bowden, Flg.-Offr. H. W.

    Davies, Ernest (Enfield)

    Gibbins, J.

    Bowles, F. G. (Nuneaton)

    Davies, Harold (Leek)

    Gibson, C. W.

    Braddock, Mrs. E. M. (L'p'l, Exch'ge)

    Davies, Haydn (St. Pancras, S.W.)

    Gilzean, A.

    Braddock, T. (Mitcham)

    Deer, G.

    Glanville, J. E. (Consett)

    Brook, D. (Halifax)

    de Freitas, Geoffrey

    Gooch, E. G.

    Brooks, T. J. (Rothwell)

    Delargy, Captain H. J.

    Goodrich, H. E.

    Brown, George (Belpsr)

    Diamond, J.

    Grey, C. F.

    Brown, T. J. (Ince)

    Dobbie, W.

    Grierson, E.

    Buchanan, G.

    Douglas, F. C. R.

    Griffiths, D. (Rother Valley)

    Griffiths, Rt. Hon. J. (Llanelly)

    Mikardo, Ian

    Snow, Capt. J. W.

    Gunter, Capt. R. J.

    Mitchison, Maj. G. R.

    Solley, L. J.

    Haire, Flt.-Lieut. J. (Wycombe)

    Monslow, W.

    Sorensen, R. W.

    Hall, W. G. (Colne Valley)

    Montague, F.

    Soskice, Maj. Sir F.

    Hamilton, Lieut.-Col. R.

    Moody, A. S.

    Stamford, W.

    Hannan, W. (Maryhill)

    Morgan, Dr. H. B.

    Steele, T.

    Hardman, D. R.

    Morley, R.

    Stephen, C.

    Hardy, E. A.

    Morris, P. (Swansea, W.)

    Stewart, Capt. M. (Fulham)

    Hastings, Dr. Somerville

    Moyle, A.

    Stokes, R. R.

    Haworth, J.

    Murray, J. D.

    Strachey, J.

    Henderson, A. (Kingswinford)

    Neal, H. (Claycross)

    Strauss, G. R.

    Henderson, J. (Ardwick)

    Nally, W.

    Stross, Dr. B.

    Hewitson, Captain M.

    Nichol, Mrs. M. E. (Bradford, N.)

    Symonds, Maj. A. L.

    Hobson, C. R.

    Nicholls, H. R. (Stratford)

    Taylor, H. B. (Mansfield)

    Holman, P.

    Noel-Buxton, Lady

    Taylor, R. J. (Morpeth)

    House, G.

    O'Brien, T.

    Taylor, Dr. S. (Barnet)

    Hoy, J.

    Oldfield, W, H.

    Thomas, George (Cardiff)

    Hudson, J. H. (Ealing, W.)

    Oliver, G. H.

    Thomas, I. O. (Wrekin)

    Hughes, Hector (Aberdeen, N.)

    Orbach, M.

    Thomas, John R. (Dover)

    Hughes, Lt. H. D. (W'lhampton, W.)

    Paget, R. T.

    Thomson, Rt. Hon. G. R. (E'b'gh, E.)

    Hynd, H. (Hackney, C.)

    Palmer, A. M. F.

    Thorneycroft, H.

    Hynd, J. B. (Attercliffe)

    Pargiter, G. A.

    Tiffany, S.

    Isaacs, Rt. Hon. G. A.

    Parkin, Flt.-Lieut. B. T.

    Tomlinson, Rt. Hon. G.

    Janner, B.

    Paton, Mrs. F. (Rushcliffe)

    Turner-Samuels, M.

    Jeger, Dr. S. W. (St. Pancras, S.E.)

    Paton, J. (Norwich)

    Ungoed-Thomas, Maj. L.

    Jones, Maj. P. Asterley (Hitchin)

    Peart, Capt. T. F.

    Usborne, Henry

    Keenan, W.

    Perrins, W.

    Vernon, Maj. W. F.

    Kenyon, C.

    Platts-Mills, J. F. F.

    Wadsworth, G.

    Key, C. W.

    Poole, Major C. C. (Lichfield)

    Walkden, E.

    Kinghorn, Sqn.-Ldr. E.

    Porter, G. (Leeds)

    Walker, G. H.

    Kirby, B. V.

    Pritt, D. N.

    Wallace, G. D. (Chislehurst)

    Lang, G.

    Proctor, W. T.

    Walace, H. W. (Walthamstow, E.)

    Layers, S.

    Pryde, D. J.

    Watson, W. M.

    Lawson, Rt. Hon. J. J.

    Ranger, J.

    Webb, M. (Bradford, C.)

    Lee, F. (Hulme)

    Rankin, J.

    Weitzman, D.

    Levy, B. W.

    Rees-Williams, Lt.-Col. D. R.

    Wells, P. L. (Favarsham)

    Lewis, A. W. J. (Upton)

    Reeves, J.

    Wells, Maj. W. T. (Walsall)

    Lewis, J. (Bolton)

    Reid, T. (Swindon)

    Whiteley, Rt. Hon. W.

    Lewis, T. (Southampton)

    Rhodes, H.

    Whittaker, J. E

    Lindgren, G. S.

    Richards, R.

    Wigg, G. E. C.

    Lipson, D. L.

    Ridealgh, Mrs. M.

    Wilkes, Maj. L.

    Logan, D. G.

    Robens, A.

    Wilkins, W. A.

    Longden, F.

    Roberts, Sqn.-Ldr. E. O. (Merioneth)

    Willey, O. G. (Cleveland)

    Lyne, A. W.

    Roberts, G. O. (Caernarvonshire)

    Williams, D. J. (Neath)

    McAllister, G.

    Robertson, J. J. (Berwick)

    Williams, Rt. Hon. E. J. (Ogmore)

    McEntee, V. La T.

    Rogers, G. H. R.

    Williams, J. L. (Kelvingrove)

    Mack, J. D.

    Royle, C.

    Williamson, T.

    Maclean, N. (Govan)

    Scott-Elliot, W.

    Willis, E.

    McLeavy, F.

    Sharp, Lt.-Col. G. M.

    Wills, Mrs. E A.

    MacMillan, M. K.

    Shurmer, P.

    Wise, Major F. J.

    Mallalieu, J. P. W.

    Silverman, J. (Erdington)

    Woodburn, A.

    Mann, Mrs. J.

    Silverman, S. S. (Nelson)

    Wyatt, Maj. W.

    Manning, Mrs. L. (Epplng)

    Skeffington, A. M.

    Yates, V. F.

    Marshall, F. (Brightside)

    Skinnard, F. W.

    Younger, Maj. Hon. K. G.

    Mathers, G.

    Smith, Capt. C. (Colchester)

    Zilliacus, K.

    Mayhew, Maj. C. P.

    Smith, Ellis (Stoke)

    Medland, H. M.

    Smith, Norman (Nottingham, S.)

    TELLERS FOR THE AYES:

    Messer, F.

    Smith, S. H. (Hull, S.W.)

    Mr. Pearson and Mr. Simmons.

    Middleton, Mrs. L.

    Smith, T. (Normanton)

    NOES.

    Agnew, Cmdr. P. G.

    Crosthwaite-Eyre, Col. O. E.

    Headlam, Lt.-Col. Rt. Hon. Sir C.

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

    Crowder, Capt. J. F. E.

    Hinchingbrooke, Viscount

    Amory, Lt.-Col. D. H.

    Cuthbert, W. N.

    Hollis, Sqn.-Ldr. M. C.

    Astor, Hon. M.

    Darling, Sir W. Y.

    Holmes, Sir J. Stanley

    Baldwin, A. E.

    Davidson, Viscountess

    Hope, Lt.-Col. Lord J.

    Barlow, Sir J.

    Dodds-Parker, Col. A. D.

    Howard, Hon. A.

    Beamish, Maj. T. V. H.

    Donner, Sqn.-Ldr. P. W.

    Hulbert, Wing-Comdr. N. J.

    Beattie, F. (Cathcart)

    Dower, Lt.-Col A. V. G. (Penrith)

    Hurd, A.

    Bennett, Sir P.

    Dower, E. L. G. (Caithness)

    Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)

    Birch, Lt.-Col. Nigel

    Drayson, Capt. G. B.

    Hutchison, Lt.-Col. J. R. (G'gow, C.)

    Boles, Lt.-Col. D. C. (Wells)

    Duthie, W. S.

    Jarvis Sir J.

    Bower, N.

    Eccles, D. M.

    Jeffreys, General Sir G.

    Boyd-Carpenter, Maj. J. A.

    Erroll, Col. F. J.

    Jennings, R.

    Braithwaite, Lt.-Comdr. J. G.

    Foster, J. G. (Northwich)

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

    Bromley-Davenport, Lt.-Col. W.

    Fox, Sqn.-Ldr. Sir G.

    Keeling, E. H.

    Buchan-Hepburn, P. G. T.

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

    Kerr, Sir J. Graham

    Bullock, Capt. M.

    Galbraith, Cmdr. T. D.

    Kingsmill, Lt.-Col. W. H.

    Carson, E.

    Gates, Maj. E. E.

    Legge-Bourke, Maj. E. A. H.

    Clarke, Col. R. S.

    Gomme-Duncan, Col. A. G.

    Linstead, H. N.

    Conant, Maj. R. J. E.

    Gridley, Sir A.

    Lloyd, Maj. Guy (Renfrew, E.)

    Cooper-Key, Maj. E. M.

    Hare, Lt.-Col. Hon. J. H. (Woodbridge)

    Lucas-Tooth, Sir H.

    Corbett, Lieut.-Col. U. (Ludlow)

    Harvey, Air-Cmdre. A. V.

    MacAndrew, Col. Sir C.

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

    Haughton, Maj. S. G.

    McCallum, Maj. D.

    1224

    1225

    Mackeson, Lt.-Col. H. R.

    Pitman, I. J.

    Stoddart-Scott, Col. M.

    McKie, J. H. (Galloway)

    Poole, Col. O. B. S. (Oswestry)

    Stuart, Rt. Hon. J.

    Macpherson, Maj. N. (Dumfries)

    Prescott, Capt. W. R. S.

    Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

    Maitland, Comdr. J W.

    Price-White, Lt.-Col. O.

    Thorneycroft, G. E. (Monmouth)

    Manningham-Buller, R. E.

    Prior-Palmer, Brig. O.

    Thorp, Lt.-Col. R. A. F.

    Maude, J. C.

    Ramsay, Maj. S.

    Touche, G. C.

    Mellor, Sir J.

    Robinson, Wing-Comdr. Roland

    Wakefield, Sir W. W.

    Morrison, Maj. J. G. (Salisbury)

    Ropner, Col. L.

    Wheatley, Lt.-Col. M. J.

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

    Ross, Sir R.

    White, Sir O. (Fareham)

    Mott-Radclyffe, Maj. C. E.

    Sanderson, Sir F.

    White, Maj. J. B. (Canterbury)

    Neven-Spence, Major Sir B.

    Scott, Lord W.

    Williams, C. (Torquay)

    Nicholson, G.

    Shephard, S. (Newark)

    Williams, Lt.-Cdr. G. W. (T'nbr'ge)

    Noble, Comdr. A. H. P.

    Smiles, Lt.-Col. Sir W.

    Young, Maj. Sir A. S. L. (Partick)

    Nutting, Anthony

    Snadden, W. M.

    Orr-Ewing, I. L.

    Spearman, A. C. M.

    TELLERS FOR THE NOES:

    Peake, Rt. Hon. O.

    Spence, Maj. H. R.

    Mr. Drewe and Mr. Studholme.

    Peto, Brig. C. H. M.

    Stanley, Col. Rt. Hon. O.

    Question put, and agreed to.

    Clause ordered to stand part of the Bill.
    The Parliamentary Secretary to the Treasury (Mr. Whiteley): In view of the lateness of the hour we do not propose to sit very much longer, and I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
    Committee report Progress; to sit again Tomorrow.

STAKEHILL DETENTION BARRACKS (INQUIRY)
Motion made, and Question proposed, "That this House do now adjourn."— [Mr. Mothers.]
11.15 p.m.
Mr. Driberg: Had I been fortunate enough to persuade Mr. Speaker this afternoon that the subject which I am bringing up now was a definite matter of urgent public importance, I should not be detaining the House at this late hour. I am enabled to do so by an intervention of Providence in the shape of the hon. Lady the Member for the Combined English Universities (Miss Rathbone) who was courteous enough to notify me that she had abandoned her right to the final half-hour Adjournment Debate.
I wish to refer to the subject of the Stakehill Detention Barracks and the court of inquiry which is to open next Tuesday at Ashton-under-Lyme. When I suggested this afternoon that this ought to be a public inquiry and not exclusively a military inquiry, my right hon. Friend the Secretary of State for War, who has been good enough to return to his place at very short notice in order to reply—and I apologise both to him and to the House, but there was no other opportunity of raising it—said that when he announced a week or two ago the setting-up of a military court to inquire into con-
1226
ditions at Stakehill, where, unfortunately, one of the prisoners had committed suicide, he had gained the general approval of the House, and that unanimously at that time the House had agreed, by implication or by its silence, that the inquiry should be held in secret and should be exclusively military. It has since further transpired, in answer to a question, that the relatives of the dead man would not be allowed the right to attend or to be represented at the court of inquiry.
My right hon. Friend may be perfectly justified in saying that; but, since that debate a few weeks ago, new facts have come to light. It was only this last weekend that my hon. and gallant Friend the Member for Aston (Major Wyatt) was apprised of circumstances which, although they relate to a tragedy which occurred a long time ago, last year, none the less cast such a suspicion on the conduct of those in charge of the detention barracks that they make the case very much more serious. After all, the case which we were debating a week or two ago was of a man who had committed suicide; he may have been a neurotic type. But the case of which my hon. and gallant Friend has particulars, of which he will give the House a few details if he is fortunate enough to catch your eye, Mr. Deputy-Speaker, is of a perfectly or apparently fit man who went into the detention barracks and was dead within three days. He was seen afterwards by his relatives with his forehead bruised and a bruise on his neck, and no inquest was held at all. This seems to me to cast a totally different light on the necessity for a real and thorough inquiry as to what has really been going on in these barracks.
Dr. Morgan: Will the hon. Gentleman say what these bruises were? Were they real bruises, or post-mortem changes, or what were they?
Mr. Driberg:I can only say that if the authorities of the barracks waited so long before calling the relatives of the dead man that his body had begun to decompose to the extent my hon. Friend suggests, then that casts even more of a reflection, surely, on those authorities.
Dr. Morgan: On the contrary. The hon. Member knows very little about post-mortem changes, because postmortem changes in the skin take place with remarkable rapidity in men who die ordinarily.
Mr. Driberg: I entirely accept the medical advice and authority of my hon. Friend, but I do not honestly think he is helping either side in this dispute very much, because all that I want to suggest is that there is a strong prima facie case for a full public inquiry into conditions at Stakehill Barracks. I would not wish for a moment to do anything that might prejudice justice for all concerned, including the authorities of the barracks. I absolutely accept that, of course. The fact that this second death—I refer to it as the second death, although it was not the second chronologically—occurred last year does not seem to me to diminish in any way the urgency of considering this matter before next week's court of inquiry opens, and it is indeed a little disquieting that the undoubtedly peculiar and suspicious circumstances of this death should only just now have come to light.
One of the main points that my right hon. Friend made this morning in his replies to supplementary questions was that he did not think the court of inquiry could be public because that might prejudice the proceedings of a court-martial which might have to be held later. In a supplementary question, my hon. and learned Friend the Member for North Hammersmith (Mr. Pritt) dealt with that point rather neatly, I thought, by citing the common practice in ordinary criminal cases, where there is always a preliminary public hearing before the magistrates before the case finally goes to the criminal court; and that is not held in any way to prejudice the final hearing. Since this afternoon's Question Time, an hon. and gallant Member who has served for some years in the Forces arid who sits on the other side of the House has put a point to me which I thought very reasonable, and, therefore, I want to put it to the House. He said
1228
that it might prejudice the court-martial if the court of inquiry were held in public because the court of inquiry is not held according to the ordinary laws of evidence. Hearsay evidence is admitted; anything can be said; people's characters can be defamed; and, therefore, it might really be prejudicial. That seemed to me a substantial point until I looked up the actual Regulations, and then I found that no evidence that is taken in a court of inquiry is admissible at a court-martial. So that does seem to confirm the validity of the point made by the hon. Member for North Hammersmith. Furthermore, as the hon. and gallant Member for Aston said this afternoon in a supplementary question, the court of inquiry is not allowed to express any opinion at all. It is confined to ascertaining the facts.
My right hon. Friend may say to us this evening that it is too late to alter the arrangements for next Tuesday's court of inquiry at Ashton-under-Lyne. I hope that he will not, and that it is still possible to alter the arrangements so that the inquiry can be held in public, and so that it need not be exclusively military; but, in any case, I hope he will say he is seriously thinking of setting up. a general inquiry of some kind, whether a judicial committee such as the Oliver Committee, or some other kind of inquiry, which can look into conditions, not only at Stake-hill, but at other detention barracks throughout the country, and see, incidentally, to what extent the recommendations of the Oliver Committee have really been put into practice.
I venture to make again the suggestion I made in the adjournment debate a few weeks ago, which seemed to some Members a little ridiculous at first hearing: that on such a committee, a not strictly military committee, there should be invited to serve ex-Servicemen of other ranks, including, perhaps, one man of generally good character who had served time in a detention barracks himself. Since I made that suggestion, many hon. Members, I am sure, will have seen the most interesting contributions to the "Manchester Guardian" and the "News Chronicle" by Mr. G. E. Hobson, a respected insurance broker of Manchester, who, when he was serving in the Navy, for some technical military offence served time in Winchester Gaol and has now published some scathing criticisms of the sentences imposed on the

1229
unfortunate servicemen who have to go to that gaol. He, I suggest, would be an admirable person—I have no personal knowledge of him—to serve on such an inquiry as I have suggested. I do not want to take up more of the time of the House, because 1 hope my hon. and gallant Friend will be fortunate enough, Mr. Deputy-Speaker, to catch your eye. I will end by saying that it is not only wrong, but damnably wrong, that a man should always have to die before our attention is directed to conditions in detention barracks.
11.27 p.m.
Mr. Pritt: I only want to take up a minute. I think there is only one thing on which judges and lawyers of every conceivable outlook in politics and profession are agreed, and that is that for psychological and practical reasons you always get a better hearing and a better result if you hear any kind of judicial proceedings in public. It is universally held by lawyers and judges that there is only one excuse for not doing this and that is the type of reason we generally describe as security. The suggestion that we might prejudice some subsequent proceedings by holding this in public is one to which no lawyer would agree.
11.28 p.m.
Major Wyatt: I would like to refer to the circumstances of the case which my hon. Friend the Member for Maldon (Mr. Driberg) has put forward. The information I have received presents the following story. I am not going to stand here and vouch for all the facts of the story, but I suggest that it supports a prima facie case for thorough investigation in public of the circumstances which could lead to such a thing happening. On 15th August, 1944, a private soldier was sent to the Stakehill Detention Camp to undergo detention for the crime of having been absent for one day and five hours. On 18th August he was dead. His sister and eldest brother and brother-in-law went to the Stakehill Detention Camp to identify the body.
Mr. Stokes: What date was that?
Major Wyatt: I do not know. A few days later. On looking at the body the brother noticed that there were two marks on the forehead and one behind each ear.
1230
He went to look closer at the marks and was told to leave them alone and not to examine the body further. No inquest was held on the death of this man, but a certificate without post-mortem was signed by a coroner, which said that the man died of heart failure. Death apparently took place after this man had been made to run a mile in seven minutes wearing full kit. Apparently, on entering the camp he had been passed by the camp doctor as fit to take such exercise, so even though there may not have been any suggestion of foul play to account for his death, it is obvious that he should not have been passed as fit if he was going to collapse and die of heart failure after running a mile.
Now there are certain circumstances in this case which, I think, deserve attention. There was a priest available at the Stakehill Camp, but none was called. There was only one person present at his death, a sergeant. After he had died and the relatives had identified him, the coffin was sent back to his home without a Union Jack; this caused great pain and distress to the relatives concerned, and, indeed, they are still distressed by this fact. They feel as if this man had died after committing some crime, although he had been absent only for one day and five hours. They feel the stigma very deeply. They made a number of attempts to get into contact with the Stakehill camp authorities to find out something about the circumstances of the death and every time they were more or less rebuffed and told that no further information was available. They even thought of having the body exhumed, in order to have these marks examined and see that the matter was taken further. They were prevented from doing this: they were told that the cost would be excessive. They were not rich people, or highly educated or literate, and they found it difficult to pursue this matter further. It was only on seeing that there was going to be a full-scale inquiry into conditions at Stakehill Camp that they thought it worth-while and advisable to take the matter up again, and see whether, at this late date, some thorough investigation could be made into the circumstances of the death. I feel that this case really does require thorough investigation by a public inquiry.
Now it is quite true that the relatives of this man—and I think quite rightly

1231
—did not wish his name to appear in the Press. We know that the Press always observes the request made by the President of an inquiry to keep the name out of the papers. There is no question, if this inquiry is held in public, of publicity being given to the name of the man concerned, and as the hon. and learned Member for North Hammersmith (Mr. Pritt) has said, having an inquiry in public will have the effect of seeing that it is really a searching and thorough inquiry.
11.33 p.m.
Major Boyd-Carpenter: I would like in two minutes to protest against the suggestion, both explicit and implicit, in the speeches to which we have listened that a military court is not a proper and competent body to investigate a matter of this sort. I have had some experience of military courts of inquiry and they have this merit in greater degree than civilian courts, the merit of understanding ab initio the military background and the military circumstances, and they start with that advantage in investigating a matter of this sort over any civilian court or tribunal. However eminent its composition, the question of the openness or otherwise of a military court of inquiry is a matter solely to be dealt with in accordance with King's Regulations. The point that is important is that this is precisely the sort of matter which is normally, according to King's Regulations, dealt with by a military court of inquiry and although what has been said on the other side- gives manifest grounds for the calling and convening of a court of inquiry it does not, in my view, give any reason whatever for departing from the normal practice.
The right hon. Gentleman, if I may say so, has taken a perfectly proper course in ordering a court of inquiry to be convened. It has been done with commendable punctuality. It sits next Tuesday, and may I express the hope that the right hon. Gentleman will not take what he himself described this afternoon as the easy course of yielding to pressure, but will say that the military court of inquiry which has been convened shall be allowed to sit. What follows after that must be for him and his advisers in the light of the findings of that court of inquiry, but I would protest against the suggestion that
1232
has been made here this evening and which was made here earlier this afternoon, that for some reason or other, the ordinary normal procedure of a court of inquiry is inadequate to deal with cases of this sort. It has dealt in an admirable and satisfactory manner with many cases involving deaths of soldiers. It is a procedure by fair, competent and trained people, and I hope the right hon. Gentleman will adhere to it on this occasion.
11.36 p.m.
Dr. Morgan: I am only interested in this matter because it happens to be on the borders of my constituency and there is a certain amount of feeling in my constituency about it. Constituents have written and asked that there should be as public an inquiry as possible and if possible that it should be held into the question of detention camps as a whole; I want to ask the Minister if he could see his way to do that and to see that proper mental arrangements are made from the psychiatric point of view. There are very few psychiatrics attending camps and I want to see this put on a proper basis.
11.37 p.m.
The Secretary of State for War (Mr. J. J. Lawson): When I announced this inquiry, in the particular circumstances as they were then, the House welcomed it emphatically and, I thought, unanimously. I stated that I was going to set up a military inquiry because there were certain irregularities shown by the previous inquiry and I thought that the best way to get at those irregularities and find out what had been done in this particular case was to have an inquiry in which those who gave evidence would be put on oath. To do that, you cannot have a public inquiry; you must have a military inquiry. When I receive the report of the inquiry I shall have to consider what to do about the report. That does not rule out, when I give my consideration to it, the possibility of a more public inquiry into the wider aspect of the question of Stakehill itself. But in this particular instance, I was sure, and I am still sure, that it is necessary to have this military inquiry in order to deal with this particular case.
Mr. Driberg: Why is it necessary to have the inquiry in private so that people

1233
can be put on oath? I do not quite understand that point.
Mr. Lawson: The military inquiry is, in essence, a private inquiry; it is not a public inquiry, it is not a court-martial, for instance. It is, by its very nature, private, and it is necessary to do that to put the people on oath. When it is over and I get the report, it does not exclude a public inquiry into the general question of Stakehill itself.
As to this regrettable incident that is said to have happened, this was the first I have heard about it. The hon. Member did say he did not wish the names of the people concerned mentioned. If he wishes, it can be dealt with by this inquiry. As I said this afternoon, it would have been easy for me to say—and from my own point of view I should like to have said it —that a more public inquiry would be held. But I wanted to have an inquiry that would probe to the roots certain statements that were made, certain
1234
results that come from the previous inquiry. I wanted an assurance about those matters, and I thought this was the best way to do it. I definitely say that not because I was against a public inquiry. It certainly does not rule it out.
Mr. E. L. Gandar Dower: May I ask the right hon. Gentleman, if he undertakes a general inquiry into conditions at Stake-hill, whether it would be possible to raise these cases again?
Mr. Lawson: In these matters I have to go very carefully, because military law is complicated. I have been in many investigations on matters of discipline in connection with courts martial. I know quite a little for a layman. But I would hesitate to give a definite reply to that question.
Adjourned accordingly at Seventeen Minutes to Twelve o'Clock.

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Preamble
The House met at half past two of the clock, The LORD CHANCELLOR on the Woolsack.
Prayers.
The Lord Barnard—Took the Oath.

THE INTERNATIONAL SITUATION.
VISCOUNT CRANBORNE VISCOUNT CRANBORNE rose to call attention to recent developments in the international situation and to statements by His Majesty's Government thereon; and to move for Papers. The noble Viscount said: My Lords, when Parliament met after the Summer Recess, a good many weeks ago, I placed on the Order Paper a Motion in general form to give an opportunity for a discussion on international affairs. For a variety of reasons, as your Lordships know, that discussion never took place. In the days which immediately followed the breakdown of the meeting of Foreign Ministers in London, it seemed undesirable to provoke a public debate which might have the effect of exacerbating an already delicate situation. Later came the announcement that the Prime Minister was to pay a visit to the United States, and I think that all your Lordships felt that any debate before his return would be premature and incomplete, and might increase the difficulties of the negotiations in which he was about to be engaged. Though politics in this country are now back on the old-fashioned Party basis, your Lordships' House have never taken the narrow view that the duty of the Opposition is to cause the maximum embarrassment to the Government whether or not that accords with the true interests of the country. Therefore, I left my Motion on the "No Day Named" list.
But I think it will be generally agreed that the reasons for holding our hands no longer apply. The Prime Minister has returned from Washington, and has given a full account of the discussions which took place there. Moreover, the
18
Foreign Secretary has also made no fewer than two speeches in another place surveying the whole scene of foreign affairs. The time, I felt, and I am sure your Lordships will agree, had clearly arrived when it was desirable for this House, which, after all, contains so many experts in this sphere of public affairs, to express its views on recent developments in the international sphere, and on the different pronouncements which have been made on these developments by His Majesty's Government.
In the old days—at least, judging by the reports of debates which I have read —there was a tendency for debates on foreign affairs to range very wide and to cover events, some important, some, perhaps., not quite so important, in every part of the world. They were, in fact, in the nature of political travelogues. But nowadays, after our experience during the last six years, we have come, I think, to be not so much concerned with individual events in individual countries. Indeed we hardly regard individual countries as separate entities. We recognize, all of us, that in the modern world they are all cogs, some big cogs, some small ones, interlocking and interdependent, in one vast international machine, and that anything that happens in any one country inevitably affects all the others. Our object, nowadays, is to find means so to adjust that international machine that it works smoothly and without friction, and if we can succeed in that task we know that events in individual countries will not disturb international harmony. It was—as I understand it—with that main problem of creating an effective international machine, that the debate in another place was mainly concerned, and it is to that problem that my remarks will be confined this afternoon. If I refer in the course of them to individual countries, it will only be in relation to that main problem.
This year, 1945, which is now drawing to a close, has witnessed events which should have raised our spirits to the highest peak of optimism. We have seen the overwhelming defeat of aggression in Europe and in the Far East. What is more, we have seen the establishment at San Francisco of a peace system which, I think, by universal agreement, is more realistic and more powerful than the League of Nations which preceded it, and

19
which has received also—as the League never did—the approval and the adhesion of the greatest nations in the world, those Powers on which peace ultimately must depend. We ought to be sanguine and even confident about the future, and yet, I suppose, there has never been a time when the minds of men were so consumed with anxiety as to what the future may bring. Why should this be? No doubt it is in part due to the natural reaction from war. For six long years we have been living in conditions of unparalleled strain, and now that that strain is relaxed we find ourselves exhausted, and the task of repairing the damage which war has caused seems, sometimes, to be almost beyond us.
Moreover, as the fog of war clears away, we can see for the first time how gigantic is the damage, both material and psychological, which has resulted from this conflict. We hardly know where to start to put it right. Europe with its huge populations drifting about without aim and without hope is indeed a spectacle which might well appeal the stoutest heart. But in addition to this hideous situation, which must weigh down the spirits of anyone who thinks at all, there have been two new developments of the most formidable kind. The first, of course, is the discovery of the atomic bomb, which makes the prospects of future wars, inevitably, even more terrible than those which we have experienced. Secondly, there is the growth, which we cannot deny, of a miasma of suspicion which is poisoning the relations at present between Russia and the other great Powers whose absolute trust in each other is necessary if war is to be prevented. To my mind, of these two developments, curiously enough, the second is infinitely the more serious. If the relations between all the great Powers were established on unshakable foundations we might really, to some extent, snap our fingers at the bomb. It would still remain a horrible weapon but it would be a weapon which was very unlikely to be used. It is the fact that the relations between the great Powers are not secure; which makes the bomb a practical danger.
The main object, as I see it, therefore, of every statesman in every country must be to remove the cause of that suspicion which to-day is undermining general confidence. That, as I see it, is the main aim
20
of foreign policy at the present time. What is the Government, and indeed what are we all doing, to further that aim? That was the main theme of the debate in another place and it has been the subject of many suggestions both on that and other occasions during recent months and weeks. There was Mr. Churchill's suggestion for a United States of Europe; there has been the proposal for a Western Pact and there has been Mr. Bevin's very far-reaching proposal for a World Assembly with members, as I understand it, to be elected directly by the peoples of the various countries. With regard to the last proposal, I, like everybody else, honour the motives of the Foreign Secretary that inspired him to put it forward, but frankly I am doubtful about it. I do not believe that in practice it is possible or desirable to make a differentiation between Governments and peoples. To do that, is to cut at the very roots of representative government. Moreover, any attempt to do that is bound to arouse suspicion in the minds of the Governments themselves and that alone is likely to kill the proposal. While, therefore, I speak as one in full agreement with Mr. Bevin's object in multiplying contacts between the nations, I believe we must work through the Governments if any effective result is to be achieved.
Finally, there was the general statement of the late Foreign Secretary, Mr. Eden, that all countries "must modify their old conceptions of sovereignty." There must be very few of us who think at all on this subject who would dissent from Mr. Eden's proposition. That is clearly our right aim but he would be the first, I think, to say—indeed I believe he did say it in his speech—that general aims have to be given practical application. Broad statements of principle are valuable in that they turn the minds of men in the right direction but they are not without their dangers. There is a tendency in the modern world, perhaps there has always been a tendency, to be mesmerized by phrases that become a sort of magic incantation in which the man in the street puts implicit trust without stopping to think what they mean or what they entail.
In one of the books of a very brilliant writer, Mr. Logan Pearsall Smith, this tendency is very acutely satirized and I should like to quote it, if you would not

21
consider it too frivolous for an occasion such as this. The passage is entitled, "Ions":
" 'Self-determination,' one of them insisted, ' Arbitration,' cried another. ' Cooperation,' suggested the mildest of the party. ' Confiscation,' answered an uncompromising female. I too, became slightly intoxicated by the sound of these vocables. And were they not the cure for all our ills? ' Inoculation,' I chimed in. ' Transubstantiation, Alliteration, inundation, flagellation, and afforestation.' "
It is possible to laugh at this: indeed it is almost impossible not to laugh at it; but it does contain a very profound truth. We must not allow ourselves to be intoxicated with words. We have already had "self-determination" which was to remove the causes of war. Then we had "collective security" which was to make war impossible. But neither of these prevented the greatest conflict in history. Do not let us gull ourselves that we shall bring about universal peace merely by setting up machinery to modify sovereignty. Indeed, if words could do it, that aim has already been almost achieved.
The members of the United Nations have assumed most far-reaching obligations under Article 2 of the Charter. There it is laid down in most unequivocal terms, and I should like to quote the words:
"All members shall settle their international disputes by peaceful means in such a manner that international peace and security, and justice, are not endangered."
Secondly:
"All members shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any State, or in any other manner inconsistent with the Purposes of the United Nations."
Thirdly:
"All members shall give the United Nations every assistance in any action it takes in accordance with the present Charter, and shall refrain from giving assistance to any State against which the United Nations is taking preventive or enforcement action."
If that is not modification of national sovereignty, I. do not know what is. It must mean, if it means anything, that the nations who have signed the Charter pledged themselves, without qualification, to subordinate their national interests, their interests as a community, to the nations as a whole, yet suspicion and mistrust still persists.
Personally—if I may be allowed a personal view—I am driven to the conclusion that the evil is far more deep-seated than the mere question of a lack of machinery and we must face the fact that the fundamental unity of European civilization, cultural and spiritual, has been temporarily destroyed. Two hundred years ago, whatever might be the disputes between this and another country, the ordinary man in Europe regarded himself as a member of the same cultural society. He moved without hindrance across the frontiers from one State to another. He was able, freely and frankly, to exchange ideas with what is now known as the common roan in other countries. The retrogression that has taken place in this respect during recent years is appalling to contemplate. We are back to the Middle; Ages; we are almost back to the Dark Ages. Each country to-day is like a fortress with its inhabitants looking anxiously over the battlements to see whence the next blow is coming. Visitors; from neighbouring lands are treated like spies; they have to pass the most stringent examination before they are allowed into any country at all. There is no free exchange of ideas between the ordinary citizens and so there is no opportunity of establishing a common viewpoint. We grow up mistrusting each other and every day that mistrust grows. That is a tendency which began long before this war and, if anything, I think it has got worse.
To-day the dividing line between those parts of Europe which are within the sphere of the Western Powers and those parts of Europe which are within the sphere of Russia, are almost becoming the dividing line between two civilizations. The contacts between these two spheres are almost daily fewer. Even the same words have different meanings. Mr. Eden, the other day, instanced the words "democracy" and "freedom," and of course what he said is profoundly true. On such a basis as that, how can a world organization, or any international organization, succeed? What I feel is needed now, above all, is to break down these artificial barriers dividing us up and recreate the intellectual and cultural unity of Europe; for Europe is, after all, the main, if not the only seat at present, of trouble. It is here, I feel, that our Russian Allies can make a tremendous contribution. We really know little or nothing—I suppose the Foreign Office

23
know—about what is happening in the Russian sphere. It appears to be shut off by an impenetrable curtain. Every now and then disturbing stories filter through and increase the general malaise.
What is the best way to kill these rumours? Let the Russian Government throw open the frontiers; let them give facilities for journalists and trained observers, and anybody else, who care to go there, and I think there would be an immediate relaxation of the tension. It may be that those who went there would not approve of all they saw, just as visitors from Russia might not wholly approve of what they saw here. But, gradually, I believe, the lines of division would be softened down. We might not agree with each other, but we should begin to understand each other. By that method alone, I believe, can a middle line —a modus vivendi—be found. Also—if I may make one further point in this connexion—let us have as many meetings as possible between the Russian leaders and the leaders of Western Europe. I do not think it matters a bit if they are not always successful. What is important is that they should take place. In that way alone, as I see it, that mutual confidence can be built up which existed at Moscow, at Teheran, and at other places during the war.
I was disturbed, as I suspect many of your Lordships were disturbed, to see in the newspapers reports from Washington in the last two or three days that no further meeting is likely between the Big Three for some considerable time. I hope that is not true, for if we merely glare at each other across devastated Europe the situation can only further deteriorate. The noble Viscount the Leader of the House may be able to give us some reassurance on that point. I am a Conservative, and I cannot be expected to be particularly enamoured of the Russian system, but there can be no one, to whatever Party he belongs, who does not want good relations between Great Britain, the United States and Russia, for on that alone must peace depend. It is for that reason that we must, all of us, regret the new friction which appears to have arisen between the Western Powers and Russia over the atomic bomb. I am not going to complain this afternoon as to the procedure which was agreed at Washington.
24
Very likely, it was the only course that could be adopted in the existing circumstances, and, at any rate, it is satisfactory to know that complete agreement was registered between Great Britain, Canada and the United States.
No doubt, too, there are many who would have preferred that the bomb should be handed over immediately to the Security Council of the United Nations. It cannot be denied, at first sight, that there is something anomalous about refusing to transmit so supreme a weapon for peace to the World Organization. But, to my mind, those who favour such a course ignore one fundamental consideration—the existence in the Charter of a power of veto by any permanent member of the Security Council against action by the Council, or by the World Organization. There are many of us, as your Lordships know, who always thought the veto provision unfortunate, but now I believe it has become absolutely disastrous. While it remains in the Charter, it is always open—or always would be open—for any permanent member of the Council to veto the use of the bomb, or even the threat of use of the bomb, in any dispute, whether the Power in question was directly concerned in the dispute or not. In such circumstances the whole deterrent value of the bomb as a means for preserving peace would be largely nullified. The Security Council could be prevented from using it, and no individual nation would be allowed to use it even for the purpose of stopping aggression. From such a situation I cannot see that anyone would benefit except the aggressor.
While the veto remains in the Charter, it is surely better that the bomb should remain in the possession of the United States in whose pacific intentions we can have absolute trust. But, if the veto were expunged from the Charter, the position would be entirely different. Then the arguments against handing over the bomb to the World Organization would largely disappear. After all, the main arguments which used to be used against the veto at the San Francisco Conference have already ceased to have any validity. It used to be said that if a great Power dissented from any decision of the World Organization, that Organization would, in any case, be unable to function, and that it was better to recognize that hard fact in the Charter. But

25
with the invention of the atomic bomb, that argument, surely, is no longer true. It is not true to say that the defection of one great Power would necessarily make the World Organization impotent. It is so devastating a weapon that it is improbable that even the greatest Powers could stand up against it. They would almost certainly be bound to bow to the will of the World Organization possessing that weapon.
In that new situation, what useful purpose does the veto serve? To my mind it is already entirely out of date; and, therefore, I would suggest to the noble Lord the Leader of the House that consideration should be given to the calling of a meeting of the permanent members of the Security Council and to propose to them the abolition of the veto to enable the bomb to be transferred to the Security Council of the World Organization. If they agreed, I think the gain to peace would be immeasurable, and the present friction, which is so unfortunate, would very largely disappear. If, on the other hand, any great Power insisted on the retention of the veto, then the world would know where the responsibility lay. I do not, of course, expect any answer to that rather far-reaching suggestion this afternoon, but I submit the idea to the consideration of the Government.
I have come to the end of what I have to say. I am afraid the picture I have painted is inevitably sombre. But the scene itself is sombre. On the other hand, I do not believe that the outlook is wholly black; there are encouraging features. If the situation in Europe is gloomy, as it undoubtedly is, in other parts of the world the problem of the inter-relationship of nations has been very largely solved. There is the example of the British Commonwealth of Nations to which the Prime Minister referred in his speech. There is the example of the frontier between Canada and the United States—3,000 miles of frontier without a single guard and with the people of the two countries passing freely across it every day of the year. What has been done in one part of the world can be done in another.
Of course, if Russia desires to sink back into isolation no one can stop her. That is a decision for her. But I cannot believe it is her intention. For she would he the first to suffer. At any rate, we must
26
do all we can to prevent it. Let us have meetings, and yet more meetings, between the Russian leaders and the leaders of the Western Powers. Let us try to recreate that atmosphere of frankness and confidence which existed in the clays of the war. Let us continually urge her to remove those artificial barriers which to-day separate and divide the peoples of Europe, and to throw open the frontiers to let fresh air in, and to recreate the unity of Europe. It is to that, and not to any mere machinery, that I believe our policy must be directed. It is to that that I hope, above all, the Foreign Secretary will turn his mind. The Foreign Secretary has a difficult and often an invidious and discouraging task, but he has, during the short time he has held office, deserved well of his country. I am sure we shall all wish him, so long as he proceeds on his present lines, God-speed in his efforts.
3.0 p.m.
VISCOUNT SAMUEL: My Lords, the field covered by this Motion is very vast. The noble Viscount who has moved it has given the reasons why he has not pursued the course frequently followed on such occasions as this of attempting any individual survey of the particular problems that now arise in many parts of the world. For the same reasons, I shall follow the same course. I could have desired, indeed, to have dealt with one particular area, the Middle East, and one special problem, Palestine, but that is too specialized to form part of a general debate, and I would express my own view that a special day to be devoted to that subject would give rise to a useful debate in which responsible members of this House might make valuable constructive suggestions, and in which, I believe, a greater measure of substantial agreement would be found than might at first sight be anticipated. But I must confess, from inquiries I have made, I find no very general desire for such a debate. Should other noble Lords wish to take part in it, however, I would make representations to the Leader of the House asking if a date could be arranged accordingly.
One particular reference I would venture to make as a preliminary. I feel sure that many of your Lordships would desire reference to be made to the successful emergence of our neighbour and close Ally, France, from the difficult and severe political crisis through which she

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has just been passing. It is, I believe, to the general relief in this country that there should have emerged a strong combined Government, headed by the national leader approved by the electors and by the Assembly; and we hope that the ending of the crisis may assure political stability in France, which is the first step to economic, financial and social security. For the rest, I propose to devote myself to only two topics, and they are the same as those to which the noble Viscount, Lord Cranborne, has addressed himself—namely, the situation created by the invention of the atomic bomb, and the present relations between this country and Russia.
The atomic bomb has created a completely new world situation. The lines have become literally true:
"A thousand years scarce serve to build a state;
An hour may lay it in the dust."
This, I think, is the first certainty with regard to the atomic bomb: that it cannot be monopolized in perpetuity by any one nation, or by any two, or by any three, and held in terrorem by them over the rest of mankind. In the first place, it is not practicable. The explosive is known; all that was necessary was to invent a safe trigger. If one group of scientists was able to achieve that in a few months, another group of scientists in another country would certainly be able to achieve the same in a few months also. Meanwhile international relations would be poisoned. If we, the British people, had not, been one of the three who had the possession of the secret of the manufacture of the atomic bomb, I think we should have seen more clearly than perhaps we do now how intolerable the present position is. If—to take perhaps an impossible illustration and merely for the sake of illustration—a group of scientists drawn from, say, Russia, France, and Italy, had come together and discovered the means of using atomic energy and of manufacturing such a bomb, and had communicated that to their own Governments and to those alone, we here in Britain and the people of the United States would at once have declared that it was impossible that we could permit a monoply in the hands of so limited a group as that.
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The second fact which stares us in the face is that, as was stated in the declaration of President Truman, our Prime Minister and Mr. Mackenzie King, there is a real danger in proceeding at once to the opposite extreme and to publishing broadcast to all the world, not merely the underlying idea of the atomic bomb (for that has long been known) but the details of its actual mechanism. At present it is true that it can be manufactured only in great plants, enormous in size, costly and conspicuous; but it is very possible that some alternative method may be discovered for the release of atomic energy of a much simpler and inconspicuous character, which would permit, almost in complete secrecy, this deadly weapon to be manufactured almost anywhere. Therefore this invention must be controlled. In order to be controlled its manufacture must be detected, and that, no doubt, will be possible, but only if it is made someone's business to do it. Consequently the second conclusion to which we must arrive with regard to the atom bomb is not only that it cannot be monopolized by one, two or three nations, but also that there must be some effective system of inspection and control in order to safeguard the world against its misuse.
But here there comes in another consideration to which so far I have not seen reference made. How far is this inspection to go? Does it involve that all military establishments should be open to the inspection of an international organization—every arsenal, every naval dockyard, the laboratories in which new military inventions are being devised and tested; that all new forms of armaments on land, sea, or in the air should be subject to inspection at their earliest stages; naval guns, submarines, torpedoes, planes, rockets, artillery—everything, in fact, except possibly small arms? Is that the proposal? If it is not the proposal, how can you be sure that you will be able to prevent the enlistment of atomic energy secretly and to the detriment of the countries of the world? Are we to make a general rule that there should be no armaments at all? That, no doubt, would be ideal but far from possible in the present age. Are we to say that there shall be no new armaments and only existing inventions should be used; or are we to say that no country is to have any exclusive development in any branch of armaments

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and that any future war should be like a duel, under the guidance of seconds, who will see that each combatant has precisely equal weapons and an equal chance? That has been achieved in one respect in the prohibition of poisonous gases, though whether the observance of that rule in the recent war was due to the fact that nations had undertaken not to use them, or to the fear of reprisals, is a moot point.
I had the privilege of attending the Disarmament Conference of 1932 as one of the representatives of the British Government, of which I was at that time a member. I took part in the work of many Committees which were given the task of trying to distinguish between aggressive weapons and defensive weapons. It was intended that by general treaty the ones should be prohibited and the others allowed. It was found, however, that there were most formidable technical difficulties in making such a differentiation, and in any case it was realized that universal inspection of all military establishments would be indispensable. Such a course would mean that all countries should agree beforehand to surrender all weapons of surprise and that every country should know precisely what weapons it would have to face if it were engaged in war. That, I believe, would be a most beneficent revolution, but whether countries would agree to it remains to be seen. That is one of the most difficult problems likely to face the United Nations Organization when it comes to close quarters with this particular problem.
We have recently read most remarkable speeches by the present and previous Foreign Secretaries, Mr. Bevin and Mr. Eden, advocating that national sovereignty should no longer be absolute and unconditional, responsible to no ones That is a most remarkable development in international policy which. I feel, should be widely welcomed, although I must at once express my agreement with the view put forward by the noble Viscount who has just spoken—namely, that the federal solution of the election of a universal or a European assembly by a direct vote of all the peoples, while leaving in being all the present Parliaments, would create a situation which would not be likely to conduce to the smooth government of Europe or of the world.
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Those two principles will, I feel certain, have to be generally agreed; first, that the atomic bomb is not to be a monopoly; and secondly, that it must be subjected to efficient control and safeguard. But there is a third principle which I believe ought to be adopted; that is that atomic energy should not be regarded merely from the standpoint of explosives but should he regarded primarily from the standpoint of industrial, economic and social development. That it can, and will, be applied to industrial use is almost universally agreed; some of our scientists who have had most to do with recent developments, men like Professor Chadwick and Professor Oliphant, as well as many American scientists, have publicly stated that they think it will only be a question of a few years before it comes into current use. The mode of its employment is easily foreseen. Nuclear fission results in the release of energy in the form of heat; heat can always be used to drive engines, engines to work dynamos, and dynamos to produce electricity. Therefore the whole of the electrical installations of the world could, in the near future, be run from nuclear energy, and countries would be independent of supplies of coal, oil or water power. No one can assert that that is certain, but, on the other hand, no one can deny that it is possible; and if it is possible, it would be for the advantage of mankind that that line of discovery should be pursued. There can be very little doubt that international competition will ensure that it will be pursued, for any country which is in the forefront of the new development will leap ahead, as did Britain at the time of the opening of the age of steam, and any country which is slow in starting will soon find itself altogether out of the running.
After all, this is a British discovery; the structure of the atom was discovered by J. J. Thomson and Rutherford at the Cavendish Laboratory at Cambridge—not Cambridge, Mass., but Cambridge, Eng.! There is no reason why the British people should, on this occasion at all events, as was done in the case of the dye industry and other industries, fall behind and allow others to lead in the development of a discovery that was first made here. Therefore I welcome most cordially the prompt action of His Majesty's present Government in appointing a Committee under Sir John Anderson to review

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the whole of the situation, and further in deciding at once in favour of intensive research on the largest scale. The problem before us now is to ensure that the same activity and resource which led to the discovery and the application of atomic energy will ensure its regulation and control in the interests of all mankind.
Happily, this matter, which is the concern of all mankind, may be subjected to machinery which has already been devised. Just at the right moment, quite independently of the discovery of this terrific explosive force, the United Nations Organization has come into being and we have the honour of knowing that it is to hold its first meeting here in this capital within the next few weeks. Whatever matters of importance may come before that Organization in the years to come, I am certain there can be none of more profound and more momentous importance than this matter which will come before it as its first business. The Government have declared on several occasions that the first principle of their foreign policy is to promote the United Nations Organization. We on these Benches wholeheartedly agree that that is the right principle. We welcome the reference of the atomic bomb to the United Nations Organization by the procedure proposed in the statement of the Prime Minister, the President of the United States, and Mr. Mackenzie King. That statement was much in advance of an earlier statement made by the President of the United States and we would cordially thank the Prime Minister, Mr. Attlee, for the great service he has rendered by his participation in the Washington Conference and for the results that were achieved.
The United Nations Organization must have leadership and it must have force at its back; but it must not be subject to any form of domination, whether by The Three or by The Five, or by the eleven in the Security Council. The Assembly of the whole fifty-one should be the final determining body within that Organization. We may be certain that the nations in general will have their own views, and consequently it would be foolish for this country to wish to go into that Conference to be held in London in January with any cut-and-dried scheme. I am sure that noble Lords will not wish
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to-day to press the Government for any detailed statement as to the precise proposals they will lay before the United Nations Organization on that occasion. Whether it would be wise to summon, as the noble Lord has just proposed, a special meeting of the permanent members of the Security Council to deal with this question, I do not know; I have not had an opportunity of considering the proposal. At first sight I am doubtful about it; it might seem that the great Powers were seeking to control beforehand the actions of the Assembly when it met. However, if there were a real prospect of a speedy agreement, perhaps it would be worth while attempting it, though it might be better done at first in private rather than by any public action.
That brings me to my second and my final subject—namely, the relations between this country and Russia which caused such disagreement at the recent Conference of the Foreign Secretaries. As a rule when a diplomatic conference is being held, after it is over a joint statement is issued to the effect that the Conference met in a spirit of full mutual confidence and reached complete agreement on all points. On this occasion, in effect, the declaration was made that the Conference met in a spirit of deep mutual suspicion and came to no agreement on anything at all. That is open diplomacy with a vengeance! That came to this country and to all countries as a painful shock. It caused almost a panic; some organs of public opinion seemed at once to come to the conclusion that all was lost, and that we were sliding straight into the next war. That, unquestionably, is contrary to every desire of all the peoples. I am confident that in this country there is the greatest distress that there should be such friction between the British Commonwealth and the United States on the one hand and Russia on the other.
I think that the true spirit animating the masses of the British people was shown not very long ago on the occasion of the-first football match between a Russian team and a British team, when the crowds were unprecedented and the enthusiasm exceeded anything that had ever been known before. It was carried to such a point that the obvious desire of the crowd was that the visiting team and not the British team should win. That spirit was unquestionably due to the admiration felt

33
by the masses of our people for the endurance, the valour and efficiency of the Russian people in the, war, and to our gratitude for the part which they had played; because, if they had not played it, probably at this very hour we should still be engaged in bitter, costly and bloody campaigns in a war which was in fact concluded many months ago.
Furthermore, there is no doubt that there is amongst our own and all peoples a very keen interest—often highly critical as to aims and methods—in the social experiment now proceeding in Russia, the largest experiment ever attempted in history, though in my judgment and in that of many of your Lordships not necessarily the best experiment or the one most likely to be fruitful. However, the fact remains that there is a great deal of interest in and sympathy with the ideas underlying that experiment. There was in consequence dismay at the failure of the Conference of Foreign Secretaries. But the failure of one Conference is not conclusive. If it were repeated, the situation would be grave, and if indeed it were constant and invariable, that would be fatal; but there is no reason to take so pessimistic a view of the results of the failure of that one Conference. Since then there has been a number of disagreeable incidents in many parts of the world in which Russian action has been involved. Sometimes when a man is suffering from an illness there will arise all kinds of apparently unrelated symptoms in various limbs and organs, just as there have arisen such symptoms all round the perimeter of international affairs; but it is all due to one microbe, and when means have been devised, by injections or drugs or whatever it may be, to dispose of that microbe, that man's illness ends completely in all its aspects, and all the various symptoms clear up in a few days, apparently by themselves. It may be the same in this case. All these various incidents in many countries may be due to a single cause, and is a diplomatic method consisting in bringing pressure to bear to secure changes in important central matters.
It is suspicion in this case which is the poison that is affecting the whole of the international body politic. I shall not go back into the history which gave rise to such suspicion before the last war. That attitude was in suspense during the war,
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when we were Allies and fighting hard in a common cause, and it is our business to see that the same attitude which prevailed for too long between the wars is not allowed to revive now. As the noble Viscount, Lord Cranborne, has said, it is very largely due to the lack of publicity, to Russian secretiveness; and, as Mr, Eden said in the House of Commons a few days ago, "We have to get to know each other, and that involves freedom to speak and freedom to comment across the frontier. Drop those barriers of censorship, and you will blow away by one gust much of this black fog of suspicion." I think that we could here confirm those words, and send that message to our Russian friends, and invite them to let the free air of publicity blow through affairs throughout the world and thereby remove many of these causes of disagreement.
I was going to give two or three instances of the false reports which arise on account of this lack of publicity, but I am detaining your Lordships too long, and so will pass on to my final point, which is that we on our side have entertained suspicions, I think unnecessarily, of Russian action in the Balkans and in sonic other countries. There are some here who see in what is happening in those countries the designs of a ruthless and determined Russian imperialism which would seek to dominate completely the politics of all the countries that are her neighbours. I believe that we shall take a false view of the present course of history in those countries, and indeed of the history of Europe for the last hundred years or more, if we do not realize that these peoples are moved very largely by social and economic factors, and that it is the agrarian question more than any other which has determined the attitude of the peoples of the Balkans, of Poland, of East Prussia and of other countries.
After the French Revolution in 1789, which was a social revolution much more than a constitutional one, the land question was largely solved by the confiscation of the great estates and the declaration that they were to be regarded as Biens nationaux. In Ireland from the time of Daniel O'Connell onwards there was a great agrarian movement which entirely dominated the politics of Ireland. After the first World War and the Revolution in Russia there was also an agrarian revolu

35
tion, with the dispossession first of the great landlords and then of the Kulaks. Now, after the second World War, we find the same process going on in Poland, in East Prussia, in Hungary, in Rumania and elsewhere. For them these questions of the monarchy, the Church and the wealthy classes are incidents in the agrarian struggle, and they look upon those factors in their societies—the Kings, the Churches and the rich—as enemies who may deprive them of the land of which they have now obtained possession. The only great State in Europe on which they can rely to support them in this great change is Soviet Russia. It is for that reason, I believe, rather than because they wish to place themselves under Russian domination, or on account of any military pressure or any other cause at all, that they are led to have for Russia a friendly understanding which, of course, is reflected in Russia itself, and which creates a situation such as that which we now see.
With regard to Anglo-Russian relations, there is also the question of the atomic bomb. Russia was one of the Big Three, and at Teheran, Yalta and Potsdam affairs were managed by three Powers, the British Commonwealth, the United States and Russia. But now the atomic bomb is in the hands of another trinity. Russia has dropped out and Canada has come in; not, of course, through any deliberate intention or political intrigue, but because the inventors of the bomb were drawn from those three countries, and, for convenience of manufacture, manufacture took place in the United States. Yet the fact remains, and the first declaration of the President of the United States was unfortunately worded so as to make it appear that these three were to be the possessors and administrators of this great new invention. One can imagine how much resented that must have been in Russia, where, as I say, they ceased to be one of the trinity concerned and saw another take their place. Let us hope that this matter will be remedied when the Assembly of the United Nations Organization meets.
We have watched with the closest interest the declarations made by the new Foreign Secretary, Mr. Bevin. They have been marked by firmness and frankness, and I think that they have aroused
36
a general admiration. If one were to strike a note of friendly criticism, it would be to urge the Foreign Secretary not to allow the feeling of resentment, to which he gave expression in his own words, to develop too far and to result possibly in recrimination. He might win popularity in certain quarters but he would, perhaps, be sorry for it, if he discovered to his surprise and regret that he was being looked upon as a second Palmerston. I remember that when Mr. Ramsay MacDonald and Mr. Snowden were Prime Minister and Chancellor of the Exchequer respectively, they went to the Conference on German Reparations at The Hague, and they there upheld the British cause with vigour and success. When they came back they found that, from being regarded as two of the most hated men in politics in England—having been pacifists during the previous war—they had become immensely popular. They were received with so much surprise, gratitude, and relief; they were taken to the heart of the whole nation immediately, and they were given the freedom of the City of London in a golden casket.
On the United Nations Organization our hopes must be set if the world is to be saved from the effects of its own anarchy. These new declarations that are being made for the surrender, not of sovereignty, but of some portions of sovereignty, are wise, timely and necessary. There is in them no derogation from a true patriotism. Patriotism and internationalism need not be opposites and should not be. By chance, two days ago, I came across a quotation from the words of a French Bishop of an earlier century. He said this:
"The Christian"—
and he might have said it of the sincere adherents of any of the great ethical religions—
"is at one and the same time a cosmopolitan and a patriot. These two qualities are not incompatible, for the world is in truth a common fatherland."
3.34 P.m.
THE LORD ARCHBISHOP OF YORK: My Lords, I propose to follow the two noble Viscounts who have spoken in confining my remarks almost entirely to the atomic bomb. I want, however, to make just one observation upon what has been said, by the noble Viscount who has

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just sat down, about Russia. We are all of us gravely disappointed and very anxious concerning the unexpected lack of co-operation between ourselves and our great Ally during these recent months. We must, however, remember that Russia has probably suffered more than any other country during this war. She has lost millions of her citizens through deliberate massacre, and vast areas of Russian land have been completely destroyed. No wonder that the Russians to-day are in a condition of nervous anxiety and suspicion, which you find in other countries, too, and which, indeed, is not altogether absent from our own country. But one thing which I think is clear in all our minds is that there can be no peace for Europe unless there is close co-operation between the United States, Russia and ourselves.
I really intervened, as I have said, to speak on some of the problems which arise in connexion with the atomic bomb. Nothing which we have discussed since the war has been of such grave importance as this matter, and I believe that if there is still a civilization in existence in a hundred years' time, the historians looking back at this year will say that the great events of 1945 were not victories but were the discoveries culminating in the discovery of the atomic bomb. I look back, I admit, with a very uneasy conscience at our use of that bomb against Japan. There may have been reasons justifying its use which have not yet been made public. But, whatever I may feel about the past, I look forward to the future with real terror, for man, for the first time in his history, has been presented by science with a weapon with which he can annihilate himself. Science, with its great discoveries, has far outrun man's mastery of himself and the control by which alone he can use these discoveries rightly. I doubt if the ordinary citizen today realizes that within the lifetime of many there may come about the complete destruction of all our civilization, and of all that has been built up during these long centuries.
I do not find any comfort when I am told that this discovery may be used for industrial purposes. I have no doubt that it will be used for industrial purposes in the future. There is a difference of opinion as to how soon it may be used for purposes of manufacture and so on, but meantime, we have the atomic bomb
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with us and ready for use long before this great discovery can be applied to industry. Nor do I find any real comfort in the thought that, at the present time, it is within the possession of the United, States. If it is to be in the possession of any one country then, like my noble friend who has just spoken, I should prefer it to belong to the United States. But if one country or three countries possess this secret it means that suspicion and fear will be fertilized in other countries. It means that there will grow up increasing fear; and, more than that, I would not trust any one country, not even our own country, with the exclusive possession of a terrific weapon like this. Even the most peace-loving countries in the world may sometimes be swayed with passion and anger and become so obsessed with hatred that rational judgment is set aside and actions are taken which afterwards are bitterly deplored.
No, it is essential that as soon as possible, some method of control should be devised for the possession of this bomb; and in any case the secret, as we have been reminded time after time, cannot be kept for very long. Sooner or later other nations and possibly groups of people may learn the secret and may possess the bomb. Then the whole future of the world will be at the mercy of people who may be irresponsible, as well as at the mercy of great nations when they go to war. So I hope that when the United Nations Organization meets the Government will see that this question of the bomb has the very first priority, and that time is not wasted unnecessarily in dealing with questions of procedure which often seem to have such a fatal fascination for conferences. But one cannot deal with the question of the bomb apart from war. It is impossible to control the bomb until war itself is abolished. So long as there is war there will always be the possibility of the use of the bomb. It can be used by some unscrupulous country which desires to cripple its opponent, or it may be used by some country which feels that without it defeat is inevitable.
I have the greatest suspicion of anything like paper pacts of peace: they have been torn up time after time. This means that there will have to be an organization controlling these bombs for the sake of the security of the world. And here I

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would venture to express my full agreement with the noble Viscount when he said that the whole question of the control of the bomb by the Security Council is really bound up with the abolition of the veto. If the veto is not abolished, I think the whole position will become infinitely more difficult than it might otherwise be. But if the bomb is to be controlled by the United Nations Organization and if this Organization is to have some control over the question of peace and war, it means that there must be some modification of national sovereignty. I agree with the warnings which were given to us about the great phrases which may have very little practical meaning within them, but there must be some curtailment of national sovereignty if war in the future is to be avoided. If every nation acts on its own for its own interests disregarding its neighbours, if every nation refuses to abate one jot or title of its national claims, then I believe that another war is inevitable, and in it I venture to say I should see the judgment of God on the hubris of man.
Behind any national organization which is to be permanent and stable, there must be the moral support and the moral conscience of the people. A very remarkable speech was made in this House about a year ago by the noble Viscount, Lord Templewood, who pointed out that the greatest need of Europe to-day was the restoration of the moral values which had been lost in the war. For a time words like "justice," "mercy" and "truth" seem to have lost their meaning. I see now some hope of those words coming back once again. The Foreign Secretary said that in the future we needed not the phrase "international law," but "world law." I think I can use a simpler phrase and I say that what the world needs to-day is the recognition of the law of God as the sovereign Father of all peoples. I see no hope really for the world, no hope for any international organization which is to be obeyed, unless behind it there is the conscience of the peoples of the world demanding the observance of the moral law which governs nations and peoples alike. And here I think the Churches have got their greatest opportunity and their greatest claim in these days to bear witness to this law. Although at the time they may be minority communities, the influence of a minority, if it is strong may
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extend far beyond the membership of its own adherents. I believe that this witness in different lands will, in the course of time, have a tremendous influence on the future of mankind.
I have said that behind any international organization there must be the support of the awakened moral conscience of the peoples of the world, but I know quite well that it will take a long time to restore universal moral standards. Sometimes statesmen, by their laws, in their organizations, can help to build up a national and an international conscience, and later on what they have built up is found to be in accordance with a growing and enlightened public opinion. I venture to hope that there will be no time lost in building up some organization which will control the bomb and which will endeavour to abolish war. In the words of Mr. Churchill, when he spoke last August:
"There is not an hour to be wasted, not a day to be lost."
3.48 p.m.
THE SECRETARY OF STATE FOR DOMINION AFFAIRS (VISCOUNT ADDISON): My Lords, it was, I feel, anticipated by all of us that the discussion to-day would take the line which it has taken. It was, in fact, inevitable. The world to-day, as the noble Lord who opened the debate displayed in eloquent and expressive terms, is a turmoil from end to end. That was, to some extent, unavoidable as the result of six years of a war which involved people everywhere. I think, too, we must agree with him in his description of the retrogression that the last generation has witnessed in, shall we say, the free habits of people in the different countries of Europe. But they were before the days of these horrible inventions. Nevertheless, I do not quite follow him when he seems to revert—I think too much—to nationalistic conceptions. I think that frontiers as we have known them will soon be as out-of-date as bows and arrows. They have no relationship, or very little relationship, to the realities and the necessities of international communications. So far as frontiers being for defence, these new weapons have wiped them all out.
We have got to look to a modification of the conception of national considerations, as they have prevailed for hundreds of years, in the face of what has been

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happening even during the last six months. I think, with the noble Viscount, that there is no essential contradiction between the maintenance of national characteristics and national self-expression and a wider international co-operation than we have ever known. These national characteristics, of course, are rooted in history, and many of them are of immense value. They have led to the creation of great riches in other forms—of art and culture. I do not think a Scotsman to-day is less a Scotsman, because anyone who is fit to be regarded as sensible would certainly say that the suggestion of armed conflict between Scots and English would be a crazy idea. It was a crazy fact once, but, since those days long ago, we have learnt to work together, although some of us down South think we are sometimes rather dominated by our fellow citizens from the North. Still the national characteristics remain as valuable as ever, and their contributions to civilization and history are permanent. For all that, these national differences have given way, insensibly, to a practical, wide co-operation without the national distinction, and we are seeing that co-operation being built up in the British Commonwealth of nations by our own characteristic methods.
My Lords, we have to face the fact that, if the world is to survive at all, then a wider and better scheme of international co-operation must be devised, but one that need not, and should not, of itself, in any way detract from the value of national characteristics. Mr. Eden said, in another place, that science every day is breaking down national barriers, or words to that effect. It is. The most reverend Primate reminded us that science, so far, is far in advance of our political institutions. That is the danger before us all. I am glad some noble Lords paid tribute to what was done at Washington with regard to the direction of developments in the use of atomic energy. I am quite sure it is true that it cannot be monopolized. We all knew that. The knowledge of these things has been spread all over the world among scientists for many years past. The "how-to-do-it" or the "how-to-.manufacture" will, before long, no doubt, be equally widely known also. The methods pursued in Washington, to my mind, represent the right methods of approach. The matter has been deliberately consigned to the United Nations
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Organization which, let us hope, will come into being in an effective form in a few weeks' time. It was right that the Commission should be established in a practical form and should approach the application of this discovery for industrial and other purposes, but, above all, it was right to determine that it should be entrusted to, and worked through, the United Nations Organization. It is only just beginning, and, no doubt, it will have to feel its way very carefully.
I do not think the suggestion made by the noble Viscount, Lord Samuel, is practical. It would be a physical impossibility to have universal inspection all over the world, as to what was being done in the manufacture of atomic bombs or the use of atomic energy. It would be impossible to have any efficient system of inspection. We cannot rely on that; all we can rely on is the building up of a state of mind among the nations to which the most reverend Primate referred when he said that it must depend on the moral consciousness of the peoples of the world to devise and be willing to use a better system for the solution of their differences than war. I do not think it could be better expressed than the Prime Minister himself expressed it in another place when he said:
"The only complete protection for the civilized world from the destructive use scientific knowledge lies in the prevention of war. No system of safeguards that will be devised, or can be devised, will of itself provide an effective guarantee against the production of atomic weapons by a nation bent on aggression."
That is a true statement and one to be worked upon. There is no other hope for the world. You cannot prevent the atomic weapon being used, and you cannot inspect the whole world. You must put your whole heart into devising a system, through the Organization being set up, for securing the world against the necessity of war. As the Foreign Secretary said—and I think rightly:
"It will be the purpose of His Majesty's Government to utilize the United Nations, may I say stretch it to the limits of its capacity from the security point of view, conscious all the time…that the world is moving so fast that a great change has taken place even since…San Francisco."
That is our deliberate purpose by every means within our power.
The noble Viscount who introduced the Motion suggested that there might be a

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preliminary meeting to discuss the abolition of the veto. With great respect, I do not think that is a practical proposal. The Assembly will be meeting in January when we shall put these things to the United Nations, and we must trust them to find a way of dealing with these issues. I do not disagree with the noble Viscount's analysis of the use of the veto.
VISCOUNT CRANBORNE: I did not intend to say a preliminary meeting. I thought it a matter which ought to be considered in due course.
VISCOUNT ADDISON: In due course it must be considered. In due course, when the United Nations Council begins to address its mind to this dreadful subject, it is bound to consider a matter of this kind. That is inescapable, but I am sure we are right in trusting the development of affairs in this great matter to the Organization which the United Nations have agreed to set up for that purpose. That is the right way to use it. While I would like to say how much I agree with the most reverend Primate, I would also like to add that I think the Churches have never had a greater opportunity, or a greater responsibility, in all history. I have often thought myself, as one of a number of struggling politicians, Seeking to do our best to direct the world into what we think is a better way of life, that, if only the Churches throughout the world would mobilize themselves and insist that every nation was guided by these great principles, they would have a much greater influence than perhaps they have hitherto ever exercised. Anyhow, the thought passed through my mind as I heard the sincere expressions of the most reverend Primate that I would pray that the Churches everywhere would realize what is due from them, and what they can do in an issue of this kind.
Not one of us could differ from the analysis of the situation which has been made by previous speakers and their conclusion that we must do all we can to abate suspicion, and that it is distrust—unfounded distrust—which is at the bottom of many of our difficulties. And let me say on that point, with regard to the recent meeting of Foreign Ministers in London, that I do not think myself it was such a great misfortune as some perhaps have accounted it. I have always thought that the meeting was rather too
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early. There had not been time enough to prepare the material for a meeting of that importance. I can say this, however: that the Government are as anxious as any of the noble Lords who have spoken that the difficulties that prevented sufficient progress in September shall be removed as quickly as possible, and we certainly will play our part in trying to remove those difficulties. We sincerely hope that the discussions will be renewed as soon as possible.
Many noble Lords have said what must be in the minds of all British citizens, even in the minds of the people who went to the football match to which the noble Viscount has referred, that we all long to be on such terms of frankness and mutual trust' with our Allies in Russia that it is almost impossible to exaggerate the strength of our feelings. I can only say that His Majesty's Government are determined to do everything they can to provide for frank discussion between us and for the removal of any ground of distrust. We have nothing to hide, and the more we can get communications the better it must be for us all.
I am sure that every speaker to-day and to-morrow will recognize that the situation in the world is so difficult that there is no room within it for old-time party controversy, and that we have got somehow, through the United Nations Organization, to fashion a system of international co-operation which must involve some modification of old-time national systems. It must be so. We are confronted from one end of the world to the other with uprisings and difficulties, all of which are to be expected after a war of this magnitude, but it is all the more the duty of sensible statesmen everywhere to deal with them with patience and with frankness. I believe myself that there is no reason whatever for failing to have well-grounded expectations that the United Nations Organization will gradually build up a system which will give us international security; because the peril before us is so great and so universal that it is the greatest incentive to resolute endeavour, and the need is so great that we cannot afford to fail.
4.7 P.m.
VISCOUNT CECIL OF CHELWOOD: My Lords, the debate which has gone so far has shown one very satisfactory feature—the very large measure of agree

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ment which prevails amongst your Lordships, both as to the state of things that exists and as to the temper, at any rate, it which those things ought to be approached. It may well be that as we go on considerable differences of opinion will appear; but I am sure that on one point we shall all be agreed, and that is on the enormous importance of the matters that we have to discuss to-day. For undoubtedly the situation abroad is disquieting. Indeed, we may say that the war has come to an end but peace has not followed. Wherever we look in Europe or, for the matter of that, in Asia, we see continued disturbance. I shall not attempt to go through the various areas of disturbance, because it would take far too long, and besides, I am not at all fitted to do it. No doubt they are part of what may be called the aftermath of war. The stress and the hardships and miseries of war necessarily encourage discontent. As has often been shown in history, war produces war, or at least a warlike atmosphere. That is normal' at the present time, and all these usual feelings have no doubt been intensified by the discovery of the atomic bomb and the additional fear and anxiety which it has produced.
As Mr. Eden said the other day, unless we wish to be blown into smithereens, some definite and vigorous policy must be evolved. The only question is: What is it to be? In this debate, and in other discussions, everyone has turned naturally to the new World Organization, and indeed that must be our chief hope. We may arrange that the process for producing the atomic bomb (as I understand it, that is the only thing which is secret about it) and other similar scientific devices (we must assume that others will almost certainly follow) will be controlled in some way by an international authority. If so, I would very much like to make one observation. I hope that the main part of that authority will be composed of a small body consisting entirely of scientists, chosen entirely for their eminence and their freedom from political bias, rather than a body of statesmen. My reason for saying that is that if the matter can be looked at purely from the scientific viewpoint, the professional training of each of the members of the new authority will emphasize to him the duty that he will have to advise impartially on the requirements necessary for world safety. How-
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ever the machinery may be arranged, it will clearly have to be official and therefore, presumably, dependent on the Assembly of the United Nations.
As for the other suggestion, that the process shall be kept secret, I confess I am rather anxious about the extent to which more than one speaker seemed to advocate the possibility of such a course. I am sure it is quite impracticable to keep it secret, and that if you try to do so the only result will be the creation of an atmosphere of suspense and anxiety, which is the very thing we are most anxious to avoid. Moreover, I agree with what has been said here and elsewhere—namely, that in the end, however carefully you plan your machinery for control, there is no complete security except by the prevention of war itself. For that we must turn to the United Nations Organization, which is the only means we have of dealing with the problem. Therefore, in any case, we have to come back to that Organization.
Let me just say a few words about the Organization and the conditions of success as an instrument of peace. The general scheme is, of course, well known; it consists in building up around the five great Powers with the other nations and it depends on the hearty co-operation of the five great Powers. That as we all know, was very much present in the minds of those who had to discuss this matter at San Francisco and before then. Great efforts, and even great sacrifices, were made to secure those conditions. All the same, it is common knowledge—and this is really the thing which is causing the greatest anxiety at the present moment—that there are doubts as to how far such co-operation, exists.
May I remind the House of the history of this matter? The first seed of this new Organization was planted at Moscow in the year 1943 at a meeting of Foreign Ministers there. At that time—and it is only right to recognize it—Russia was gat least as anxious as any of the other Powers represented to create such an organization and co-operated very heartily in arriving at the resolution that was announced. Then followed the Dumbarton Oaks Conference in 1944 and the first draft of the Charter. Then it was that we first began to find there was, unfortunately, a difference on one fundamental point—namely, the machinery for the en-

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forcement of peace, for the forcible prevention of aggression. There was no complete agreement and the negotiators so reported.
Then came the Yalta Meeting and the formula that was there devised to meet the problem. That formula was, putting it quite simply, that no coercion could be applied to any aggressor without the unanimous consent of all the five great Powers, even if one of them was itself an aggressor. That was very much disputed and discussed at San Francisco, but the Conference nevertheless decided to accept it on being told that unless that were done Russia would not agree to the Charter. As I understand it, that was said quite plainly. I think almost everybody here to-day regrets very much that that was so and that so indefensible a proposition was endorsed by the Conference. However, it was urged that without the support of all five great Powers no solid or lasting peace could be achieved, and we were further assured that all the great Powers might be trusted to regulate their policies by the spirit of genuine international co-operation, without which, as has been repeatedly said this afternoon, no written compacts could be of any value. That, of course, applies to Russia as well as to the other Powers amongst the five.
I want to say that I do not wish to appear to throw the slightest doubt on the genuineness of the desire of the Soviet Government for peace. I have always believed that the Soviet Government was a peaceful Government, not because I admire altogether the economic and other doctrines of the Bolshevik Party, but simply because there does not seem to me to be any good reason for a Russian Government to desire war. They have an enormous territory, largely undeveloped, which they are making the greatest efforts to develop; additional territory, especially if it were occupied by an alien people, would be a hindrance and not a help in their great work. Moreover, they are still in a stage of experiment with a Government having many very novel features which will require time to test and to improve. I believe, therefore, that Russia wants peace and wishes the United Nations to co-operate for peace. What I am not quite sure about is whether the Russian conception of peace is exactly the same as ours. It certainly
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looks as if they are in favour of an international organization for peace provided it does not interfere with them. Did not the Yalta Conference really mean that there was to be a division of nations, some of which were to do as they liked, and some of which were to do as they were told—a kind of division of the peoples of Europe into grown-ups and children? Certainly the Russians' recent international actions favour that view. On several occasions now they have made arrangements of their own, so we learn from the Press, with neighbouring States without apparently mentioning the matter even to their chief Allies in the war. It is true that in most of those cases Russian troops had been mainly instrumental in liberating the countries concerned, and it might be urged that the Russians were merely clearing up the mess of war; but even so, a greater openness with their Allies would have been more in tune with the new Charter.
Now comes the Persian incident, where no such explanation would be possible. I do not really know exactly what has happened there, and I do not want to say anything much about it; but it seems to me very strange that, in view of the Charter, the Russians should be said to have taken—let us hope that the reports are not accurate—action of a rather strong kind in interfering with Persian independence, or at any rate with Persian freedom of action. I need not dwell on the agreements which were made at the time when Russian and British troops entered Persia. It is enough to remark that it was expressly provided that that was not to be a military occupation, and that it was not to be an interference with Persian independence. It was merely to safeguard the communications between the Fighting Forces of the Allies and their bases outside. I feel that I ought to add that this action by the Soviet was taken in a district which has long been the subject of interest and even anxiety on the part of this country. I am quite sure that we ought not to do anything provocative in this matter. That is obvious, and we are all agreed about that. I also agree, however, with those who think that there is nothing provocative in can-dour; on the contrary, I think that it is the best way to avoid provocation and misunderstanding. I rejoice, therefore, that in one of those admirable speeches which we have learnt to expect from him,

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the Foreign Secretary spoke very openly on these and cognate matters.
The Foreign Secretary concluded his recent speech with a very eloquent passage in which he described what he thought would be the proper organization of the community of nations in order to avoid all dangers of this kind. I do not want to go into the details of that proposal; it was a revival, almost in so many words, of the old Tennysonian vision of "the Parliament of Man, the Federation of the World." If it could be fulfilled we should all rejoice. I should most heartily rejoice. But I think that the difficulties in the way, as has been pointed out this afternoon, are very great. Mr. Bevin cited the cases of the United States of America and the Union of South Africa as precedents for the kind of organization which he thought might be established first in Europe and then in the world; but I think we must recognize that the component parts of those States —South Africa and the United States—had far more common ground culturally, linguistically and historically than can be attributed to the States of Europe at the present time. It must be remembered that attempts that were made, with great courage and vigour, for many years to bring about a closer federal union of the Dominions of the British Commonwealth turned out to be completely unrealizable. I feel considerable doubt, therefore, whether in the immediate future, or even in the fairly distant future, such a proposal as the Federation of the World is practical politics.
LORD STRABOLGI: My Lords, would the noble Viscount forgive me for a moment? This is very important. I read the speech of the Foreign Secretary, and his idea of this World Assembly was that it was for the purposes of discussing peace and keeping peace only, and not a World Federation. Surely the noble Viscount can give it higher praise than he is doing?
VISCOUNT CECIL OF CHELWOOD: My Lords, no doubt that is true, and my noble friend is perfectly right; but in point of fact you could not have such a federal or confederated body as that, with the power of ordering all questions connected with peace, without a very large abandonment—I will not say of sovereignty or independence but of the existence of the nations as separate nations. The United
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States of America began by an agreement between the States to join together to defend themselves against the forces of this country, but grew into complete union. That must happen, in view of the practical steps which must necessarily be taken in the working out of such a scheme, or at least so it seems to me. I do not mean for a moment to say that you ought to abandon something of that kind as the ultimate aim before you; but I think that one of the guiding points in. deciding whether any particular international proposal is desirable or not should be whether it would work in with the ultimate federation or combination of States on the lines indicated by the Foreign Secretary. But for the present I would rather see all our efforts concentrated on the support and development of the Charter organization.
I agree very much with what was said by my noble friend the Leader of the Opposition as to the desirability of frequent contacts and meetings and other means of drawing the nations together, particularly as far as we and Russia are concerned. I think that that is essential, but, after all, that is one of the main things that is proposed to be done by the Charter itself. I cannot help thinking that we could do a great deal, and I hope that we shall do a great deal, by utilizing the Assembly of the United Nations properly in future. It is true that the members of that Assembly are not to be nominated by the direct vote of the peoples of the different States, which I think would be an operation of very considerable difficulty; but it will bring together—and that is the essential part of it—these 51 States, with the right to discuss fully and freely and openly every possible danger, remote or immediate, to peace, and, what is much more than that, every possible measure which can promote the prosperity and well-being of the States themselves. I think that that is the greatest of all remedies, and the best form of that contact which my noble friend desires. You can have these people brought together year after year, and if necessary many times in the year, in order to discuss all these things. I believe that that is the best possible antiseptic against misunderstanding and suspicion—the open discussion of all differences of opinion in public.
I venture to make this suggestion to the Government far their consideration,

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though it may not be thought by them to be of any value. Cannot we do something more ourselves to bring the nations together? Many of us are agreed that the so-called veto proposals are one of the great obstacles to a closer union of the nations. The division of the nations into two classes, such as I have tried to describe, must be open to very grave objection, and indeed is based on a retrograde nationalism which is the very thing we all deplore. I agree with my noble friend the Leader of the House when he says that it will be very difficult to make a direct alteration at so early a stage in what was agreed on at San Francisco. He knows much more than I do of the difficulties, but I can well imagine that there may be very grave difficulties of that kind, even though the coming of the atomic bomb has really altered the whole situation which existed at the time of the San Francisco agreement. But even if we cannot make an alteration in the actual provisions of the veto, could not we do this: could not we make a public statement that we, at any rate, would never use our veto, our right to object to action, to protect ourselves against action recommended by the other members of the Council? If we could make some such statement as that and invite the adhesion of other Powers to that statement, we might well, leaving the veto there, get friendly agreement that it would not be used in any way to compromise the effectiveness of the other signatories of the Charter.
I am sure that if that could be done it would be hailed with the greatest possible delight by all the smaller Powers of the world, and not least by our own Dominions. Whether this is a practical proposal or not is not for me to judge. That is a matter, obviously, for the Government. I can only conclude by saying that in spite of what I have said, I do welcome most heartily the attitude taken up by the Government in another place. I most heartily and entirely agree with them that the greatest, perhaps the only, hope of peace is by our zealous support of the United Nations Organization.
4.32 p.m.
THE LORD BISHOP OF CHICHESTER: My Lords, I am glad to follow so great an international statesman as the noble Viscount, to whose speech this afternoon,
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as always, we have listened with such profit. There is one aspect of the international situation to which I should like to refer. The crisis is a crisis of confidence. After Germany's repeated and brutal assaults in the last 75 years, there can be no wonder at the insistence by France and the rest of the United Nations that there shall be insurance, as complete as we can make it, against her power to go to war. Germany now has suffered an overwhelming defeat, and it is difficult for anyone who has been in that country to think that she can recover military power in any foreseeable period. But even if she could, the crisis of confidence is not confined to Germany; it is a general crisis. There is a tendency in all nations, the strong as well as the weak, to suspect other nations, a tendency for each to fear that other nations are hatching military, political or economic designs against their security and their interests, and this lack of confidence paralyses national and international recovery in so many directions. It poisons the repeated attempts at peace settlement, it infects article after article of the Potsdam Agreement. It was the obvious cause of the breakdown of the conference of Foreign Secretaries in London. And the atomic bomb supplies a test case. The various plans which have been brought forward to control the atomic bomb have so far, in my opinion, come to grief because the Powers do not trust one another.
And yet the gravity of the issue, as has been said this afternoon, is unparalleled, and there is no time to lose. So long as this fundamental distrust remains, so long as the planning and policy in international conferences is governed by suspicion and fear, we can get no further. Therefore—and I am not going to he Utopian in what I am about to say—I am join with those who appeal for the opposite approach, who counter fear by hope and refuse to be numbed and paralysed by the deadly poison of more or less complete distrust of every other nation. So, I would join with others who call upon the nations to treat one another as friends, and to use the international scene as a positive task to be travelled through and tackled together. This means a complete change of outlook. The old way has been unsuccessful; why not try the way of friendship? As I said, I am anxious not to be considered Utopian, and when I am asked "How?" or "Where?" I

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would say first of all that we must go beyond politics. The noble Viscount the Leader of the Opposition has already given expression to that necessity, for if we confine ourselves to politics we get nowhere.
There are things more important than politics. Science and culture present wide fields for this trial of friendship. But the field on which I would now concentrate special attention is the economic field. The fundamental problem with which the nations are faced is the problem of human welfare. The ordinary man in every nation has to have sufficient food, shelter and warmth. The world's material resources suffice to give every ordinary man enough. It is not a childish or Utopian proposal that we should put in the forefront of our international programme, not how to prevent war pr control the atomic bomb, but how the nations can plan together on an economic basis, with the fullest help of the discoveries of modern science, to give the ordinary man a decent chance in life. If this problem, which is a soluble problem, is solved, it would do more for the prevention of war than any World Organization specifically designed for that object. Of course, a World Organization like the United Nations Organization is not excluded in any way by such a proposal, and I realize how intimately bound up is the Social and Economic Council with the Charter Organization. It is possible to help both interests together, but in my opinion it makes all the difference towards success where the emphasis is laid.
I would ask your Lordships to consider Europe, the seething cauldron from which wars in modern history have come. It is possible to look at Europe from two points of view. One way is to look at Europe as consisting of twenty or thirty armed camps, exhausted after a long and terrible war but all of them planning for the day when they can reassemble their strength and direct all their policies, social, economic, home and foreign, as do those who fear or hate their neighbours. There is another way to look at Europe—as a single Continent whose whole economy is now in ruin, an economy which can only be saved if all its resources are used by the nations together to aid its recovery. Let me quote from the United Nations Report on the Relief and Rehabilitation needs of Europe:
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"The economy of Europe has been running downhill fast. Production is already at unbearably low levels. It is clear that the liberated nations of Europe are confronted with a grave economic crisis, created by the war's disruption of world economy and transportation. It will grow more acute as winter sharpens the hardships of the people. The entire economy of the Continent is closely interlocking and interdependent. If weakened nations go to pieces, others will be shaken. No nation in Europe can-remain sound unless the others can begin the climb towards normal recovery."
If you look at Europe from the former angle, as a body of separate armed camps, nothing can prevent another war. If you look at Europe from the other point of view, you will not only be able to solve the economic problem if you are determined to do it, but you make the chance of another vast European or world war more difficult.
There is a kindred point when dealing with these facts to which I would also refer. There is a sense in which the world's material advance has outstripped our moral capacity and the atomic bomb is a supreme example. The President of the Royal Society, writing to The Times on August 6, said that moral factors were involved. We have all listened with great interest and admiration to the Foreign Secretary's picture of the prospect of a World State, and we have listened with interest and admiration also to Mr. Eden's suggestion of much greater modification of sovereignty. As the noble Viscount, Lord Cecil of Chelwood, rightly bade us, we should not be lost in these rather new proposals to the immediate duty of the Charter Organization, but at the same time he also made the remark that the discovery of the atomic bomb had entirely changed the situation as it appeared at San Francisco.
I hope myself that the Government will further explore this possibility of a World State in which, of course, the frontiers between Governments and peoples can hardly be properly drawn. I agree with the Leader of the Opposition in his criticism that you cannot appeal over the Government to the people, but looking at the international scene, not only from the military but from an economic point of view I am, I own, impressed by the fact that the Economist, which is a paper paying special attention to economic considerations, has in a recent article plunged for a World State. But for the fulfilment of any such aim, any United Nations

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Organization, much more any World State, must be, as the most reverend Primate has said, under the control of moral law and must be backed, as Mr. Bevin has said, by moral force. These things cannot be manufactured, yet there is, I believe, a far greater respect for the moral law, and more willingness to accept its authority, than politicians often realize, just as I believe there is a greater willingness among ordinary people, who are the greatest sufferers from war, to try the policy of friendship between nations, than our realists will admit.
During the last seven months I have travelled much on the invitation of a number of foreign Churches. I have been to France, America and Germany. In each of these countries I found a longing for friendship with other countries, and I also found a respect for right, for moral law. The victories of the Allies and the fall of Hitler reinforced that respect and the general conscience of humanity paid homage to it. I found it in France last spring. I found there special friendship for Britain, coupled with a homage to this idea of a universal moral law, especially among the men of the Resistance Movement. I found it in the United States this summer—a desire for friendship between Britain and America but also including an association with all other nations and the idea of a universal human family governed by moral law. In Germany, the other day, I found a Protestant Church in which a deeply penitent confession of offences against the moral law was combined with an almost hungry appreciation of any step which began to show a sign of hope or a spirit of friendship.
With this I close. I welcome what the noble Viscount said about the challenge to the Churches. I would remind the noble Viscount and other noble Lords that the great majority of the members of the Churches are the laity and the laity must have increasing responsibility for Christianity in these days. I went to Stuttgart as one of a delegation of the World Council of Churches. I went with a French pastor, a Dutch pastor and two Americans to visit the Protestant Council. That Council made a complete confession of war guilt from which I extract the following phrases:
"…we with our people know ourselves to be not only in a great company of suffering,
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but also in a solidarity of guilt. With great pain do we say: through us has endless suffering been brought to many peoples and countries. What we have often borne witness to in our own congregations, that we declare in the name of the whole Church."
M. Maury: the French pastor, replied and said:
" It is not easy for you to make such a declaration. It helps us to remember your fight for justice. We cannot take your misery away from you, but we have a common duty to build something new in the Western world. We will do everything we can to secure that Germany has its full place in a new beginning."
And the Protestant Bishop, old Bishop Wurm of Wũrttemburg, said he was specially glad that a delegate of France had spoken thus. "How different from the days when we used to say of each that the other was the arch enemy." We are in a crisis of confidence. Such are the foundations of a new beginning and a new hope—first, the acceptance of the moral law; and, secondly, the willingness to work with all other nations in a spirit of friendship.
4.51 p.m.
LORD STRABOLGI: My Lords, this has been a long debate, but I believe I am right in saying it has been on a high level and that, on many fundamental matters, there has been a general spirit of agreement. I do not want, unnecessarily, to break up the party, but I had a profound shock this afternoon, and it was delivered to me by no less a person than the noble Viscount below the gangway, Lord Cecil of Chelwood, at whose feet I have sat for so many years and upon whom I look as the great prophet of the brotherhood of man and the advocate of preserving the peace of the world by international co-operation. When he rose and made his opening remarks, I thought the House of Cecil would be divided because he was going to disagree with his noble kinsman who spoke as Leader of the Opposition. I refer to the reception accorded by all in this House, except the noble Viscount the Leader of the House, to the very remarkable suggestion of the Foreign Secretary last Friday. I refer to the suggestion for a directly elected International Assembly for the purpose of preserving peace. I should have thought that would have been hailed as something deserving of the most careful consideration. It has no doubt been carefully considered by them, but the two noble Lords of the House of Cecil, and the noble

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Viscount who speaks for the Liberals, and all, indeed, except the right reverend Prelate who has just addressed your Lordships, found and stressed the difficulties in this idea, and rather I thought under lined and exaggerated them.
The idea is very old. As my noble friend the Leader of the Opposition said, it goes back to the poems of Tennyson, and even farther than that. This idea of an International Assembly of the people goes back to the medieval ages in the heyday of the Catholic Church, the universal Church of the time. This was the idea, at any rate, of the Catholic Church of those days, which was without any rival, as a means of preserving peace, and when Mr. Bevin makes a proposal of this sort, I think it is the duty of us all who have been brought up or been converted as Socialists and, therefore, as internationalists to give it every support. There are much more recent examples also; the First and Second Socialist Internationals had the same motive. And for many years now we have had meetings of the Inter-Parliamentary Union. They are never attended by Ministers or members of Governments. I played some part in them between the wars. They are meetings of elected members of all Parties of the Parliaments of various States who can be got together. I do not say that they have done any particular good, but they have certainly not done any harm.
I believe I am right in saying that in the closing years of the first World War, among those working on a plan for a League of Nations, or League of Free Peoples, or the various organizations that were being canvassed and examined then, there was one idea. which received a good deal of favour, particularly in the United States of America. The noble Viscount, Lord Cecil, knows more about this than I do, and he will correct me if I am wrong. It was the plan whereby the Assembly of the League of Nations was to be on these lines. The idea, at any rate, was disussed by men of some importance. If no importance was attached to the discussions I will bow to the superior knowledge and experience of the noble Viscount.
VISCOUNT CECIL OF CHELWOOD: As far as I know, there was never any proposal that the Assembly of the League of Nations should have any different position from the Assembly of the United
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Nations proposed now. Personally, I think they can gradually grow up into some such scheme as Mr. Bevin suggested. To establish that scheme now would be to produce disaster.
LORD STRABOLGI: This may have to grow like the British Constitution itself, but the noble Viscount will not deny that when those of us who were watching the working out of the League of Nations itself and became rather doubtful of its efficacy—and he was one who wanted to improve and strengthen the organization—one of our proposals was that the Assembly should have representatives of all Parties of all Parliaments among its members.
VISCOUNT SAMUEL: Not directly elected by the people for that purpose.
LORD STRABOLGI: How else do you elect members of Parliament if not for that purpose?
VISCOUNT SAMUEL: The present proposal is that the peoples should go to the polls all over Europe and elect members for the Assembly, irrespective of the Members of Parliament.
LORD SIRABOLGI: I am not sure that that was exactly proposed by the Foreign Secretary. I suggest this is a most important proposal that has come from the Government, and I think the Foreign Secretary made it clear that he was, on this occasion, speaking for himself. He spoke about the duty of deciding matters of peace and war, and that that supreme power rests on this House of Commons so far as this country is concerned. His words were:
"I would merge that power "—
that is, the power of the House of Commons—
" into the greater power of a directly elected World, Assembly in order that the great repositories of destruction and science on the one hand may be their property, against the misuse of which it is their duty to protect us—"
It is made clear that the object of this Assembly…the almost sole object of this Assembly in Mr. Bevin's words—is the preservation of peace.
If such a body can preserve peace then, in view of the speeches we have had this afternoon and on previous occasions when the atomic bomb has been discussed, and in view of the terrifying

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pictures drawn by the noble Viscount, Lord Samuel, and other speakers, let us at least try this, and have a directly elected Assembly by people directly electing their representatives, to sit in a World Conference to keep the peace. Where is the man who will deride that and try to find faults and difficulties? It is a tremendous conception, as the gloomy speeches of your Lordships this afternoon surely demonstrated. I hope your Lordships are not going to turn down this idea out of hand. I suggest that it is worthy of a great deal of support, and, certainly, most careful consideration, and not the airy sweeping away it received at the hands of the noble Viscount who leads the Opposition.
I must, however, thank him—and I am sorry he is not here, but I hope he will do me the honour of reading my words—for one suggestion he made which I think will receive, and has already received, wide assent everywhere. Many of us who are trying to follow these matters are becoming more and more convinced that the earliest possible meeting of what is called the Big Three is now necessary. I do not know what has transpired in the United States recently—which was mentioned by one of your Lordships—but if we can get this meeting before the January 7th meeting of the Constituent Assembly of the United Nations Organization, I think it is absolutely essential that we should do so. The situation to-day is not one of unmitigated gloom, it is true. There are some optimistic and encouraging features. While your Lordships have borne witness this afternoon to the amount of suspicion abroad in the world and among the great nations who were the Allies of yesterday, fighting as comrades in arms in the deadliest of all struggles, there are, however, matters of great congratulation. I am going to break new ground for one moment only in referring to one of them
I will not make many remarks about it because it is a judicial tribunal, and matters are sub judice, but one of the most encouraging things to-day is the proceedings of the great International Court at Nuremburg. There you have the misleaders of the German people arraigned for the crime of planning war. I believe I am correct in saving—and I do so with great respect to the Lord
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Chancellor—that that has never been recognized in International Law as a crime before. It was a sovereign right. All the war criminals in the past have been tried or were intended to be tried for breaking the laws of war; but here these men are being tried for preparing war. That is a tremendous departure and will now, I presume, become part of the International Law of the nations. That is an excellent beginning for the meeting of the Constituent Assembly which will take place in Westminster in January next, and, I should think, would be a most excellent stimulus to its deliberations.
Your Lordships have spoken of the miasma of suspicion, as the noble Viscount, Lord Cranborne, called it, and all your Lordships have deplored this growth of suspicion and hesitation and mistrust in the relations of the great Powers. The breakdown of the Five Powers Foreign Ministers' Conference has been mentioned. As the noble Viscount the Leader of the House has said, and as Mr. Bevin has admitted, it probably met prematurely. But there is this widespread suspicion. Why is it there? Every one of your Lordships has made it perfectly clear, and indeed every speaker in another place made it perfectly clear in the two days' debate on foreign affairs last week, that we all want to see the United Nations Organization firmly established and working successfully. Every one of your Lordships has agreed upon that, and every one of the Leaders of the Governments concerned—I believe there are 51 Member States—are equally sincere and insistent upon it. But you have a kind of duality to-day in the conduct of foreign policy by the principal Allies of the Second World War. You have, on the one hand, this attempt—I am sure a sincere and earnest attempt—to set up an organization which is to prevent future wars; and, on the other hand, perhaps as a kind of reinsurance, you have going on a series of moves or developments which look very much like the beginnings of the old game of power politics. No one nation is innocent; all are guilty of this.
You have the French—and we must sympathize with them—demanding certain strategic safeguards along the Rhine. You have the policy in Greece which the present Government inherited from the Coalition Government, which is based on

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strategic needs and safeguards. There is indignation expressed by the Foreign Secretary of Great Britain at any attempt by our Russian Allies to secure a foothold on the North African coast of the Mediterranean. In the Pacific you have the United States insisting apparently, if the Service Chiefs in America are speaking authoritatively, on the future possession of important bases for strategical purposes; and you have the Russian moves in Persia—or, if not moves, at any rate you have a policy in Persia which is the subject of a recent Note—and on the borders of the Russian frontiers in Europe. So all of us are apparently engaged in seeking to hold strategical positions for the eventuality of —what? For another war? The Governments, I repeat, are with sincerity and earnestness, endeavouring to set up the United Nations Organization and attempting to outlaw war for all time. Why then is there this duality? I suppose it is, as I suggested, because there is felt to be a need for reinsurance.
It is no use blaming the Admirals and the Generals They have a natural habit of beginning to think of the next war as soon as the present war is over. That is their professional business, and we cannot criticize them. But there is a great deal of difference between thinking about a future war and making paper plans for it, and making preliminary moves for placing your forces in strategical positions in preparation for it. That is getting rather near the crime now being charged against the defendants at Nuremburg of planning war. You may say: "These are natural precautions. This is all defensive; this is in case of a breakdown of the United Nations Organization." But because this is going on, you have these suspicions, and I must admit that the only way I can see of getting over them is by an early meeting at the very highest level. Therefore, with great humility, I would like to support also the hope that His Majesty's Government will succeed in persuading its colleagues in the matter to hold a meeting of the Leaders of the three great States principally concerned, on whom the future policy of the coming vital months depends.
5.8 p.m.
LORD HUTCHISON OF MONTROSE: My Lords, I have sat through the whole of this debate and listened with great in
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terest to many very good speeches. Especially I was struck by the speech of my noble friend Viscount Samuel. I could not help thinking that this Chamber was truly said to be a Council of State by the noble Viscount who leads, with such distinction, His Majesty's Opposition. The more we get foreign affairs out of Party politics, the better for this country and for the countries of the world. What we want is continuity of policy—a long-range policy; not just trying to patch up the difficulties of the moment but a much longer-range policy than we have been using in the past. Of course, the sooner we get this problem of the atomic bomb and its power in war settled, the better for the world. I think the suggestions put forward are wise and the sooner they are carried out the better it will be. I would point out that, having discovered this bomb and used it for the purposes of destruction, there is no reason why our great scientists should not develop it further and use it as a great source of power and good for the world. In fact, instead of destroying civilization it may create a new civilization. At any rate, it is wise, I think, not to exaggerate its power. After all, it has got to be applied, and the power to apply it has to exist before it can be used in any future war.
In dealing with foreign affairs, I think it is a mistake to imagine we have got to the end of wars. Both here and in another place I have had many talks with my noble friend who has just spoken on the means to induce the Government of the day to consider those things which were necessary to prepare the country to face what might come. I hope this Government will avoid the mistakes of previous Governments in that respect. I hope they will make up their minds about the amount of force which is required to carry out any possible attack on this country or on countries allied with us. We all say we cannot expect a war after this devastating war, but I remember we said the same after the last war. I never thought there was going to be another and I therefore left His Majesty's Service and went into politics. There I thought I would meet la guerre politique, and I did. I think the country generally is now more same and is demand-that the Government: of the day shall look at what is necessary to protect this country in case of need. It is not only the quantity, but the quality of the Forces

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for which we want to provide, and for the necessary brains behind them. You cannot have a really successful foreign policy unless you have an instrument behind that policy. The Foreign Office has always said to us: "Tell us your force and we will tell you our policy." We have always said: "Tell us your policy and then we will tell you the force required to carry it out."
In these days of frayed nerves, after the dreadful war which has afflicted people all over Europe and all over the world, I think that when we talk of foreign affairs, of what other countries are doing, of why they have not done this or that, we ought to be very careful of the words we use and ensure that we do not give causes of irritation to those countries. I notice a good many remarks in the Press about what Russia is doing in various parts of Europe and in Iran. I feel that the prevention of future wars and the rearrangement of a new world depends upon America, Russia and ourselves hanging together. We can guarantee peace only so long as we do hang together. If you irritate people, especially people like the Russians, you create suspicion, and suspicion will die only after years. To a system of Government such as exists in Russia, pin-pricks can become things of great magnitude, when we and other people do not intend them to be more than pin-pricks. It seems to me, therefore, that we should very carefully consider anything of that nature going from our Foreign Office to a country like Russia. I believe we are very well served in Russia by our Ambassador and staff there.
Here I would like to say that the Foreign Office has been shockingly short of information about the various countries with which they dealt; they did not know what was going on in many countries. Therefore, it is necessary for the Foreign Office so to organize the diplomatic staffs abroad as to ensure that they are fully equipped not only with economic advisers but with people who will find out not only what the Government are doing in a particular country but what the people in that country arc doing and saying. That can only be done by a really first-class service on the economic side and on the inquiry side, inquiry as to the general conditions and feelings of the people. That, I think, has been one of the failings
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of the Foreign Office in the past and I hope the present Foreign Minister will take the necessary steps to solve the problem. It will also require the co-operation of the Treasury, but if they can give £100,000,000 to the building trade or something like that, the amount that would be required would seem very small.
There is one other thing I wish to say before I leave that subject. We have recently seen demands, both by our reporters and by American reporters, for greater freedom in telegraphing their reports from Russia to London and American newspapers. Do not let us criticize a country like Russia too much. They have gone through a difficult time since the last war and they have had to build up slowly. They are not quite sure how the various reports are going to be used. I think it would be wise for our Press not to ask for too much at once, but to have patience and gradually to develop better Press communications not only with Russia as a whole but also with the various countries in which Russia is now predominant. That question, I think, wants very careful handling by whoever is responsible at the Foreign Office.
I would like to ask the Government if they would answer three questions tomorrow when the Lord Chancellor replies. My first question concerns Greece. We are all confused about it; we are told one thing one day and another thing another day. I understand that in March of next year there are going to be elections in Greece to elect a new form of Government, and that the plebiscite on the question of whether Greece should be a Republic or a Constitutional Monarchy has been put off for three years. I cannot imagine a worse situation for any Government to be in. What kind of work will that Government do during those three years? Surely the right thing is to have the election, and after that is over to have the plebiscite as quickly as possible. There may be something about which we do not know which has made this postponement necessary, but unless it is something very grave it seems to me that whatever Government is elected in March it will not have a chance of dealing with Greek affairs until after the plebiscite has been held. I should like to know, therefore, what the Government think about that. I know what Mr. Bevin

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said the other day, but I cannot believe that putting the plebiscite off for three years is wise.
We have seen the result of the recent Elections in France. General de Gaulle has formed his Government, which again is only a short-range Government to hold office until the people are consulted again. I hope that we shall take every chance of saying to the French people how much we sympathize with them in their efforts to create order in their distressed and broken country. I am sure that economically France will recover more quickly than any other European country, but what I am not so sure about is whether the French will recover their political sanity. That is their affair, but anything that we can do to help them to get on to a sound economic basis will undoubtedly help towards their regaining a sound political situation. We wish the French well, and we want to help them in every way we can.
I have been very concerned about the position on the Nile. I am not talking now about the situation in Palestine or Syria or the Lebanon, but we are bound to face the situation which is gradually developing in Egypt, in the Nile Valley, on the Canal and in the Sudan. It is a problem which requires handling with very great care, because it is undoubtedly a problem which very intimately concerns this country and the Dominions. If anything can be said tomorrow, therefore, as to what is really happening in Egypt and
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in relation to the Egyptian situation, I shall be glad. I remember when the father of the noble Lord, Lord Henderson, very nearly settled that problem for all time with Nahas Pasha.
We have heard from many quarters that we cannot expect a new world unless we have a spiritual uplift. We have to get a better moral tone in the world. All I can say is that we had better begin at home, and have a look at our own people. I am afraid there is a great deal of work to be done here, and the best we can do is to have a fine moral tone in this country as an example to the rest of the world.
THE LORD CHANCELLOR (LORD JOWITT): My Lords, I beg to move that the debate be now adjourned.
Moved, That the debate be now adjourned.—(The Lord Chancellor.)
On Question, Motion agreed to, and debate adjourned accordingly.

SUNDAY ENTERTAINMENTS ACT, 1932.
Order made by the Secretary of State for the Home Department, extending Section 1 of the Act to the County Borough of Stockport:
Laid before the House (pursuant to Act) for affirmative Resolution, and ordered to lie on the Table.
House adjourned at twenty-five minutes past five o'clock.